Question

At the end of a full year mary garber had $6248.95 in her saving account. If the rate of interest was 12.253%, how much money did Mary have in the bank at the beginning of the year?

Answer 1

Answer:

$5,566.84

Explanation:

to determine the amount of money that Mary had in her account at the beginning of the year we can use the resent value formula:

present value (PV) = future value (FV) / (1 + interest rate)ⁿ

where:

• FV = $6,248.95
• interest rate = 12.253%
• n = 1

PV = $6,248.95 / (1 + 12.253%) = $6,248.95 / 1.12253 = $5,566.84