Question

Your grandmother invested one lump sum 17 years ago at 4.25 percent interest. Today, she gave you the proceeds of that investment which totaled $5,539.92. How much did your grandmother originally invest

Answer 1

Answer:

The lump sum invested was $2,730.30.

Explanation:

Giving the following information:

Invested one lump sum 17 years ago at 4.25 percent interest. Today, the proceeds totaled $5,539.92.

We need to calculate the original amount that this person invested 17 years ago. We will use the following formula:

PV= FV/(1+i)^n

PV= 5,539.92/ (1.0425)^17

PV= $2,730.30