Question

Find the present value that will grow to $25,000 if interest is 6% compounded quarterly for 19 quarters. The present value is $ (Round to the nearest cent as needed.)

Answer 1

solution:- The formula for compound inteɛest is - A= P lition where A = final amount that account has grown to e p = the stacting amount. in inteɛest zate per compound number of compounds. n= In this question A = 25,000 p is unknown value we have to find i is 0.06 since there are 4 com pounding peciods peč year when the intejest zate is compounded quarterly and n is 19. A = P(itin 2500o Pc + 0.0

25ooo = p / 1.0 TS 25000 = P ( 1.326950 795) . p= 25000 - 1-326950745 = 181840. 19 p = 18,840:19 Thus, $ 18840.1g will grow to $ 25,000 if intrest is 6 m. compounded quarterly for lo quetečs.