Q.7

Question

0

737

4

How much should be invested today to provide $1,800.00 in one year? Assume 10% interest compounded annually.

a. $1,636.36

b. $1,782.00

c. $1,620.00

d. $493.15

e. $1,647.42

Guest Jan 9, 2016

+5

Best Answer

The answer is "a"-$1,636.36. The formula you use to calculate this is:

PV=FV(1 + R)^-N, PV=Present value, FV=Future vale, R=Interest rate per period, N=Number of periods.

PV=1,800 X 1.10^-11

PV=1,800 X .909090.......

Pv=$1,636.36

Guest Jan 9, 2016

Guest · Answer 1 · 2016-01-09T05:52:20

The answer is "a"-$1,636.36. The formula you use to calculate this is:

PV=FV(1 + R)^-N, PV=Present value, FV=Future vale, R=Interest rate per period, N=Number of periods.

PV=1,800 X 1.10^-11

PV=1,800 X .909090.......

Pv=$1,636.36

CPhill · Answer 2 · 2016-01-09T07:32:49

The exponent in guest's answer was probably a mis-type.....it should be " -1 " rather than " - 11"

Guest · Answer 3 · 2016-01-09T07:41:06

Thanks CPhill for correcting me. I'm a lousy typist and too lazy to re-ckeck my "typing".

CPhill · Answer 4 · 2016-01-09T07:54:26

Eh...it's no big deal.......we knew what you meant, anyway....!!!!