Question

Tuition of $3400 is due when the spring term begins, in 4 months. What amount should a student deposit today, at 12%, to have enough to pay tuition

Answer 1

Answer: The student should deposit= $3,272.40

Step-by-step explanation:

The formula we need to use is

FV = P ( 1 + rt )

where:

F V = the future value.

P = the principal amount.

r= the rate of interest. = `12%= 0.12

t= time in years. = 4/12= 1/3 =O.3333

FV = P ( 1 + rt )

$3,400 = P (1 + 0.12 X 0.3333)

$3,400 = P (1 + 0.039)

$3,400 = P (1.039)

P= 3400 /1.039= $3,272.40