SOLUTION: Megan wants to buy a designer handbag and plans to earn the money from babysitting. Suppose the interest rate is 7% and she is willing to wait one year to purchase the bag. How muc

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Question 1164662: Megan wants to buy a designer handbag and plans to earn the money from babysitting. Suppose the interest rate is 7% and she is willing to wait one year to purchase the bag. How much babysitting money will she need to earn today to buy the bag for $550 one year from now?
Answer by greenestamps(13195) About Me  (Show Source):
You can put this solution on YOUR website!


x = amount of money now

x(1.07) = amount 1 year from now, at 7% interest

She wants the amount 1 year from now to be $550:

1.07x+=+550
x+=+550%2F1.07

Use a calculator....