Question

What principal investment is needed if it is supposed to grow to $12,400 in 4 years with an interest rate of 4.75% if the interest is computed annually

Answer 1

Explanation:

FV= PV (1+i)^n

FV = future value = 12400

PV = principal

i = decimal interest per period = .0475

n = periods = 4

12400 = PV ( 1 + .0475)^4

solve for PV = $ 10 299.25