At Compound interest and at a certain rate of interest, a sum of money amounts to $92,610 in 4 years and to $ 97,240.50 in 5 years. Find : 1.the rate of interest 2.the amount in 6 years (nearest) 3.the amount in 3 years
At Compound interest and at a certain rate of interest, a sum of money amounts to $92,610 in 4 years and to $ 97,240.50 in 5 years. Find : 1.the rate of interest 2.the amount in 6 years (nearest) 3.the amount in 3 years.
1) 97,240.50 / 92,610 =1.05 - 1 x 100 = 5% The interest rate on your investment.
2) PV = FV / [1 + R]^N
PV = 92,610 / [1 + 0.05]^4
PV = 92,610 / 1.05^4
PV =92,610 / 1.21550625
PV =$76,190.48 - The original investment.
3) Using the same formula, you will find that the amount in 6 years will be =$102,102.53.
4) Similarly, you will find that the amount in 3 years will be =$88,200.00.
