I need $ 15000 after 5 years and I can deposit $ 10200 right now. At what compounded interest rate I should deposit my amount($10200) in bank that I could get $ 15000 after 5 years.
2006-08-02 20:52:51 · 5 answers · asked by mugheezs 1 in Business & Finance ➔ Personal Finance
A little over 9% compounded annually. (Actually about 9.8%, I did this in my head) and that is quite high, you'll need another investment to yield that high of a return
I'm wondering how the math was done with the answers that gave 8.1% as an answer. I did this in my head but we disagree on almost a full interest point. The return is $4800. And now the calculator shows $10,200 X 9.5% is $4845 which is how I believe I was taught to figure interest. Can someone explain the discrepancy before I really have to get left brained? Math not my strongest subject but this is just simple interest.
2006-08-02 21:03:37 · answer #1 · answered by -Tequila17 6 · 0⤊ 0⤋
PresentValue: $10200
Future Value: $15000
Length of Investment: 5
Interest Rate: 8.01085188%
FV = PV * [( 1 + r )n]
15000 = 10200 [( 1 + .080185188)5]
15000 = 10200 [( 1.080185188)5]
15000 = 10200 ( 1.47058824 )
2006-08-03 04:41:08 · answer #2 · answered by Adyghe Ha'Yapheh-Phiyah 6 · 0⤊ 0⤋
8.01851873%
you can check my answer by doing:
10200 X (1.0801851873)^5=15000
I am sorry to say, only in a finance book can you yield that high of a return on a savings, virtually impossible on the Planet Earth.
2006-08-03 04:01:34 · answer #3 · answered by lme_888 2 · 0⤊ 0⤋
Let me know what bank you do because that is about 9%
2006-08-03 03:57:02 · answer #4 · answered by alwaysmoose 7 · 0⤊ 0⤋
Yes.
2006-08-03 03:56:52 · answer #5 · answered by NA A 5 · 0⤊ 0⤋