Question 1061267: Brono invested a certain amount of 8% annual rate for 2 years to gain an interest of php 4,800.how much did he invest?
Answer by Theo(13342)   (Show Source):
You can put this solution on YOUR website! if the interest is compounded yearly, then:
f = p * (1+r)^n becomes:
x + 4800 = x * (1.08)^2
f is the future value witch is equal to x + 4800.
p is the present value which is equal to x.
r is equal to .08 per year.
n is equal to 2 years.
subtract x from both sides of the equation to get:
4800 = x * (1.08)^2 - x
factor out the x to get:
4800 = x * (1.08^2 - 1)
simplify to get:
4800 = x * .1664
divide both sides of the equation by .1664 to and solve for x to get:
x = 4800 / .1664 = 28846.15385
he would have to invest 28846.15385 to get total interest of 4800 after 2 years at 8% interest per year compounded annually.
f = p * (1.08)^2 becomes:
f = 28846.15385 * (1.08)^2 which becomes:
f = 33626.15385.
subtract your initial investment of 28846.15385 from that to get:
interest earned = 33626.15385 - 28846.15385 = 4800.
any small different you see when you do the calculations yourself will most likely be due to intermediate rounding of results.
i stored the intermediate results in the calculator which minimizes internal rounding.
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