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Solve the following word problem by using Table 11-2.
How much must be invested today at 16% compounded quarterly to have $7,000 in 4 years? Round your answer to the nearest cent.
2 answers
Po(1+r)^n = 7,000.
Po = amount inv. today.
r = 0.16/4 = 0.04 = quarterly % rate .
n = 4*4 = 16 compounding periods.
Po = amount inv. today.
r = 0.16/4 = 0.04 = quarterly % rate .
n = 4*4 = 16 compounding periods.
1 answer