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ABC Bank is offering 3.6 percent compounded quarterly on its savings accounts. You deposit some amount of cash in the saving account today. After 5 years, you have $89,719 in your account. How much did
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ABC Bank is offering 3.6 percent compounded quarterly on its savings accounts. You deposit some amount of cash in the saving account today. After 5 years, you have $89,719 in your account. How much did you deposit today

User Wouter Vanherck
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1 Answer

3 votes

Answer:

PV= $74,999.97

Step-by-step explanation:

Giving the following information:

Interest rate= 0.036/4= 0.009

Number of quarters= 5*4= 20

Future value= $89,719

We need to determine the initial inventment. We will use the following formula:

PV= FV/(1+i)^n

PV= 89,719/ (1.009^20)

PV= $74,999.97

User Salil Luley
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3.8k points
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