MATH SOLVE

2 months ago

Q:
# Problem 8 - Simple and Compound InterestAt an effective annual rate of interest of 5.3%, the present value of $7425.70 due in t years is $3250. Determine tProblem 4 - Simple and Compound InterestHow much would you invest today to have $9500 in 8 years if the effective annual rate of interest is 4%?Problem 8 - Simple and Compound InterestAt an effective annual rate of interest of 5.3%, the present value of $7425.70 due in t years is $3250. Determine t ?

Accepted Solution

A:

Answer:P8) [tex]t=7.02 years[/tex]P4) Today you have to invest $6941.55P8) Is the same P8 above Step-by-step explanation:P8) First of all, we can list the knowns [tex]VP=7425.70[/tex], [tex]I=3250[/tex] and [tex]i=5.3[/tex]%, so we use [tex]VF=VP+I=7425.70+3250=10675.70[/tex] then we use [tex]t=\frac{ln(VF/VP)}{ln(1+i)}=\frac{ln(10675.70/7425.70)}{ln(1+0.053)} Β =\frac{0.363}{0.051}=7.02 years[/tex]P4) First of all, we can list the knowns [tex]VF=9500[/tex], [tex]t=8[/tex] and [tex]i=4[/tex]%, so we use [tex]VP=\frac{VF}{(1+i)^{t} } =\frac{9500}{(1+0.04)^{8} } =6941.55[/tex]P8) Is the same P8 above