Question

What launch song must a deposit at a 10% annually interest rate compounded annually in order to have $60,000 in the fund at the end of 10 years

Answer 1

Answer:

Step-by-step explanation:

Deposit=?

Given that

Annual rate is 10% =0.1

r=0.1

Amount A=$60,000

t=10years

The formula for compound interest, including principal sum, is:

A = P (1 + r/n)^(nt)

Where,

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per unit

n=12months

t = the time the money is invested or borrowed.

So,

A = P (1 + r/n)^(nt)

60,000=P(1+0.1/12)^(12×10)

60,000=P(1+0.008333)^120

60,000=P(1.008333)^120

60,000=P× 2.707

Then, P=60,000/2.707

P=$22,164.418

So, he should have deposit $22,164.418 to yield an amount of $60,000 in ten years time at a rate of 10% compounded annually

Answer 2

Answer: $23133 must be deposited.

Step-by-step explanation:

We would apply the formula for determining compound interest which is expressed as

A = P(1+r/n)^nt

Where

A = total amount in the account at the end of t years

r represents the interest rate.

n represents the periodic interval at which it was compounded.

P represents the principal or initial amount deposited

From the information given,

A = $60000

r = 10% = 10/100 = 0.1

n = 1 because it was compounded once in a year.

t = 10 years

Therefore,.

60000 = P(1 + 0.1/1)^1 × 10

60000 = P(1.1)^10

60000 = 2.5937P

P = 60000/2.5937

P = $23133