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3 years ago

Suppose you invest $2500 each year in a savings account that earns 12% per year. How much will be in the account in 10 years?

Business

1 answer:

iVinArrow [24]3 years ago

4 0

Answer:

Final Value= $43,871.84

Explanation:

Giving the following information:

Suppose you invest $2500 each year in a savings account that earns 12% per year.

Number of years= 10

To calculate the final value we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit= 2,500

i= 0.12

n=10

FV= {2,500*[(1.12^10)-1]}/0.12= $43,871.84

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Answer:

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Explanation:

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and we need to know the time it will take to pay the loan:

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time n

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$200 \times \frac{1-(1+0.0051667)^{-n} }{0.0051667} = 10000\\$

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$(1+0.0051667)^{-n}= 1-\frac{10000\times0.0051667}{200}$

$(1+0.0051667)^{-n}= 0.74166667$

Now, we use logarithmics properties to solve for time:

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part B

If there is a charge of 2% then Principal = 10,000 x 102% = 10,200

we use that in the formula and solve:

$(1+0.0051667)^{-n}= 1-\frac{10200\times0.0051667}{200}$

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$-n= \frac{log0.7365}{log(1+0.0051667)$

-59.34880001 = 59.35 months

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