Anna bought 8 tetras and 2 rainbow fish for her aquarium. The rainbow fish cost $6 more than the tetras. She paid a total of $
2 answers:
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Response:
To accumulate $7,500 in three years, the required one-time deposit is $4388.17
Step-by-step explanation:
Basic Financial Formulas
A commonly used formula for calculating present and future values is
Where FV represents the future value, PV denotes the present value, r signifies the interest rate, and n indicates the number of compounding periods. It’s essential to remember that r and n must correspond to the same compounding duration, e.g. r is compounded monthly while n is expressed in months.
The inquiry seeks to determine the PV necessary as a one-time deposit to achieve a future value of $7,500 in 3 years at an interest rate of 1.5% compounded monthly.
FV=7,500
r=1.5%=0.015
n=3*12=36 months
We have changed n to months since r is monthly compounded. The equation
must be arranged to isolate PV.
Response
: The amount necessary as a one-time deposit to accrue $7,500 in three years is $4388.17[[TAG_54]]