John wants to have $2000 in 3 years. The current rate of return for a high interest savings account is 2.8%, compounded annually. How much must John invest now to have $2000 in 3 years?
6 years ago
Answered By Alireza R
V = P(1+r/n)(nt)
V = the future value of the investment=2000P = the principal investment amountr = the annual interest rate=2.8%n = the number of times that interest is compounded per year=1t = the number of years the money is invested for=3
6 years ago
Answered By Alireza R
V = P(1+r/n)(nt)
V = the future value of the investment=2000P = the principal investment amountr = the annual interest rate=2.8%n = the number of times that interest is compounded per year=1t = the number of years the money is invested for=3
2000=P(1+ $\frac{2.8}{100}$2.8100 ) $^{\left(3\times1\right)}$(3×1) =P(1.086374)
$\therefore$∴ P=1840.987
6 years ago
Answered By Alireza R
V = P(1+r/n)(nt)
V = the future value of the investment=2000
P = the principal investment amount
r = the annual interest rate=2.8%
n = the number of times that interest is compounded per year=1
t = the number of years the money is invested for=3
2000=P(1+ $\frac{2.8}{100}$2.8100 ) $^{\left(3\times1\right)}$(3×1) =P(1.086374)
$\therefore$∴ P=1840.987