Answer:
Current deposit amount = $324.65 (Approx.)
Step-by-step explanation:
Given:
Cost of bicycle = $400
Future amount = $400
Rate of interest = 11% = 0.11
Number of year = 2 year
Find:
Current deposit amount
Computation:
Compound interest formula
A = P[1+r]ⁿ
Future amount = Current deposit[1+Rate of interest]ⁿ
400 = Current deposit[1+0.11]²
400 = Current deposit[1.11]²
400 = Current deposit[1.2321]
Current deposit amount = 400 /1.2321
Current deposit amount = $324.65 (Approx.)
