We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
5000=P*(1.02)^3+P*(1.02)^2[where P=investment made in year 1 and 2]
5000=P[(1.02)^3+(1.02)^2]
5000=P*2.101608
5000/2.101608=P
Hence P=investment=$2379.13(Approx).
7.
We use the formula:
A=P(1+r/1200)^12n
where
A=future value
P=present value
r=rate of interest
n=time period.
3000=P(1+0.05/12)^4
P=3000/(1+0.05/12)^4
=(3000*0.983505508)
=$2950.52(Approx).
4 Question6 LO1 How much would you have to invest in years 1 and 2 in...
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