1. a loan of $11 200 due in 5 years, with interest of 4.4%/a compounded quarterly.

2. an investment that will be worth $128 500 in 8 years. The interest rate is 6.5%/a, compounded semi-annually.

frosttyfrog Feb 17, 2021

#1**+1 **

FV = PV (1+ i)^{n} n is the number of periods 5 yr x 4 = 20 periods

i = decimal inteest PER PERIOD = .044/4

PV = present value = loan amount = 11200

FV = futere value

FV = 11200 ( 1 + .044/4)^{20 }= $ 13939.31 interest earned = 13939.31 - 11200 =..........

2.) Same equation with different numbers:

128500 = PV (1 +.065/2 )^{16 }Solve for PV

ElectricPavlov Feb 17, 2021