Question
For the following investment, calculate the present value (principal) and the compound interest. Use Table 11-2. Round your answers to the nearest cent.
Click here for Table 11-2
Compound Amount $130,000
Term of Investment 12 yrs
Nominal Rate 11%
Interest Compounded (annually)
Present Value $________
Compound Interest $________
Click here for Table 11-2
Compound Amount $130,000
Term of Investment 12 yrs
Nominal Rate 11%
Interest Compounded (annually)
Present Value $________
Compound Interest $________
Answers
same type again
Po(1+r)^n = 130,000.
Po = present value.
r = 0.11 = annual % rate.
n = 12 = the number of compounding periods.
I = P-Po = 130,000-Po.
Po = present value.
r = 0.11 = annual % rate.
n = 12 = the number of compounding periods.
I = P-Po = 130,000-Po.