document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1033292>Question 1033292</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Using the present value formula to determine the amount to be invested now, or the present value when needed. The desired accumulated amount is $4200. after 9 years invested in an account with 4% interest compounded quarterly. </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #647861 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=647861\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> the discrete compounding formula is f = p * (1+r)^n.\r<BR>\n" );
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document.write( "f is the future value<BR>\n" );
document.write( "p is the present value<BR>\n" );
document.write( "r is the interest rate per time period<BR>\n" );
document.write( "n is the number of time periods.\r<BR>\n" );
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document.write( "since the number of compounding periods per year is 4, you would ....\r<BR>\n" );
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document.write( "divide the annual interest rate by 4.<BR>\n" );
document.write( "multiple the number of year by 4.\r<BR>\n" );
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document.write( "you will get the interest rate per quarter and the number of quarters.\r<BR>\n" );
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document.write( "4% per year compounded quarterly becomes .04 compounded quarterly becomes .04/4 = .01 per quarter.<BR>\n" );
document.write( "9 years * 4 = 36 quarters.\r<BR>\n" );
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document.write( "f = p * (1+r)^n becomes f = p * 1.01^36\r<BR>\n" );
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document.write( "you are given that f = 4200.\r<BR>\n" );
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document.write( "the formula becomes 4200 = p * 1.01^36\r<BR>\n" );
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document.write( "divide both sides of this equation by 1.01^36 to get 4200 / 1.01^36 = p\r<BR>\n" );
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document.write( "solve for p to get p - 4200 / 1.01^36 = 2935.484788.\r<BR>\n" );
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document.write( "to see if this is correct, replace p with 2935.484788 in your original equation after you adjusted for the time periods to get:\r<BR>\n" );
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document.write( "4200 = 2935.484788 * (1.01)^36.\r<BR>\n" );
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document.write( "you will get 4200 = 4200.\r<BR>\n" );
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document.write( "this confirms your solution is correct, assuming you constructed your interest rate per time period correctly and your number of time periods correctly.\r<BR>\n" );
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document.write( "since these were constructed correctly, your solution is confirmed to be good.\r<BR>\n" );
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document.write( "your solution is the present value required is 2935.484788.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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