A company will need $60 comma 00060,000 in 88 years for a new addition. To meet this goal, the company deposits money in an ac

Question

3 years ago

12

count today that pays 1212% annual interest compounded quarterly. Find the amount that should be invested to total $60 comma 00060,000 in 88 years.

1 answer:

kiruha [24] · Answer 1 · 2022-03-24T00:05:17+03:00

Answer:

$24,233 should be invested.

Explanation:

Future value is the sum of the compounding amount of interest and its principal at a given rate for some given period of time.

According to given date

Future value = FV = $60,000

Time period = n = 8 year

Interest rate = r = 12%

Future value = PV ( 1 + r )^n

$60,000 = PV ( 1 + 0.12 )^8

$60,000 = PV x 2.476

PV = $60,000 / 2.476

PV = $24,232.63

A company will need ​$60 comma 00060,000 in 88 years for a new addition. To meet this​ goal, the company deposits money in an ac