Question

-what is the present value of $30,000 to be paid at the end of 23 years, using an interest rate of 16%?

-How much cash must be deposited in a savings account as a single amount in order to accumulate $300,000 af the end of 11 years, assuming that the account will earn 12% interest?

-How much cash must be deposited in a savings account as a single amount in order to accumulate $50,000 af the end of 12 years, assuming that the account will earn 12% interest?

Answer 1

to cet the I => Present value of $ 30,000 be paide end of 23 years, wing interest rate of Compound Intrest - Am o formula as follows 16 y. =7 A = p.citin .. A = Accumulated camount 30,000 amount (Present value) :.ic intrest rate 16% 0.16 pa principle ame 100 :in= number of year _. 23 years. 1. So, 23 30,000 PC1+0.1672 PC11623 39900 = P (30,375) 30,000 . z P 30,000 30 376 P= 987,621 les So, present value is $987.621

much с a account 2 =) How cash deposited in a saving single amount in order accumulated $ 300,000 at the end intrest. to of 11 years at 127, follows => compound interest formula as A = Pcitish A= Accumulated amount = $ 300,000 P= Principle is interest amouns e cash deposite) rate 92 0.12. 100 n- number of year . 11 years. 300,000 "l PC170,12)" 300,000 = Bobbet p (1.12)." p (3.478) 300,000 a 300,000 p. 3.478 P= 86, 2560469 lis 86,256 Cash deposite must be. $ 86,256.

3 = How much cash must be deposited accumulated. $ 50000 cet end of 12 year at 12% întrest = Compount intrest formule cas follows A = .P Chin A = Accumulated amount soooo is întrest rate 12 0.12 Too P= Principle (cash deposite? na number of year. 56789 50,000 Born EPCI+0.12)'2 p Cloth) P (3.895) 12 50,000 50,000 Soooo ap 3.895 12,836,970 Sul 12,837 Crush must be deposited. $ 12,837