Question 593990: Show work.
Good morning, Please I need help with this problem.Thanks in advance
A credit union pays 7.4% annual interest compound annually. What deposit today (present value)would amount to $200,000 in 10yrs.Hint: Solve the compound interest formula for P.
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A credit union pays 7.4% annual interest compound annually. What deposit today (present value)would amount to $200,000 in 10yrs.Hint: Solve the compound interest formula for P.
-----
A(t) = P(1+(r/n))^(nt)
200,000 = P(1+(0.074/1))^(1*10)
----
Solve for "P":
200,000 = P(1.074)^10
P = 200,000/(1.074)^10
P = $97,946.11
=====================
Cheers,
stan H.
|
|
|
