SOLUTION: an ivestor would like his investment to grow to R550 000 by the end of its term. How much should the investor invest now if the term is 11 years and the intrest rate is 14%?

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Question 729589: an ivestor would like his investment to grow to R550 000 by the end of its term. How much should the investor invest now if the term is 11 years and the intrest rate is 14%?
Found 2 solutions by lynnlo, ikleyn:
Answer by lynnlo(4176) About Me  (Show Source):
Answer by ikleyn(53427) About Me  (Show Source):
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an investor would like his investment to grow to R550 000 by the end of its term.
How much should the investor invest now if the term is 11 years and the interest rate is 14%?
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The compounding period is not given, so I will assume that compounding is made annually.


Let A be the starting amount (= principal).


Write the formula for the future value of the annually compounded account

    FV = A%2A%281%2B0.14%29%5E11,

or

    550000 = A%2A1.14%5E11.


It gives for the principal

    A = 550000%2F1.14%5E11 = 130139.56.


ANSWER.  The investor should invest about $130,139.56.

Solved.