Asked by Michellle
a company will need $30,000 IN 7 YEARS FOR AN ADDTION. TO MEET THIS GOAL THE COMPANY DEPOSITS MONEY IN AN ACCOUNT TODAY THAT PAYS 7% ANNUAL INTREST COMPONDED QUARTERLY. TO FIND THE AMOUNT THAT SHOULD BE INVESTED TO $30,000 IN 7 YEARS.
HOW MUCH SHOULD THE COMPANY INVEST?
HOW MUCH SHOULD THE COMPANY INVEST?
Answers
Answered by
Henry
P = Po*(1+r)^n
r = (7%/4)/100% = 0.0175 = Quarterly % rate expressed as a decimal.
n = 4 Comp./yr. * 7yrs. = 28 Compounding
periods.
P = Po*(1.0175)^28 = 30,000
Po = 30,000/(1.0175)^28 = $18,456.85 =
Initial deposit.
r = (7%/4)/100% = 0.0175 = Quarterly % rate expressed as a decimal.
n = 4 Comp./yr. * 7yrs. = 28 Compounding
periods.
P = Po*(1.0175)^28 = 30,000
Po = 30,000/(1.0175)^28 = $18,456.85 =
Initial deposit.
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