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My question is: someone receives $7000 for a trip in 3 years. His building society offers 5% per annum which will be compounded quartely. How much (to the nearest dollar) should he deposit?

Could someone please tell me how to work it out and what the answer is. That will be so helpfull if someone could do that for me

2007-04-24 19:52:09 · 2 answers · asked by Anonymous in Science & Mathematics Mathematics

2 answers

F = P(1 + r/4)^4n
P = F/(1 + r/4)^4n
P = 7000/(1 + 0.05/4)^12
P = 7000/(1 + 0.0125)^12
P = 7000/1.1608
P = $6,030.56

2007-04-24 20:14:49 · answer #1 · answered by Helmut 7 · 0 0

i guess this would help you
let the deposit be principle(p) & $7000 be amount(A)
rate(r) =5%
time(T)= compounded quartely * 3 years
you could find the answer by using the formula

A=(P+R/100)the whole power T

2007-04-25 05:37:14 · answer #2 · answered by sathiya m 1 · 0 0

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