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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

Guest 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.

Guest May 22, 2017

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