This is the question: Interest is compounded annually. How much would you need to invest today to earn $600 in 10 years with an interest rate of 8¼%?
I have a sample problem, but I don't understand how they moved in one of the steps. If you could help me out that would be great I have to hand this in tomorrow. Please let me know if I didn't make something clear. Thanks in advance.
2006-06-14 23:13:11 · 3 answers · asked by Anonymous in Education & Reference ➔ Homework Help
N+600=N(1.0825)^10
i think you can identify the parts of that. now let's solve.
1.0825^10=2.2094
N+600=N(2.2094)
i solved graphically, and N=about 496. 496.104, to be more exact.
i hope i've helped.
2006-06-14 23:30:13 · answer #1 · answered by donlockwood36 4 · 7⤊ 0⤋
Compound Interest Formula:
S = P(1+i)^n
Where
S = amount
P = principal
i = Interest rate per conversion period
n = total number of conversion periods
2006-06-14 23:28:56 · answer #2 · answered by Gray Matter 5 · 0⤊ 0⤋
you hv to find principal amount(P).put the formula
2006-06-14 23:17:22 · answer #3 · answered by rash 2 · 0⤊ 0⤋