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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

 May 22, 2017
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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. 

 May 22, 2017

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