Question

How much will you spend on an investment if you want to receive $7,000 at an annual rate of 6% compounded weekly in 4 years?

Answer 1

The investment required is: $5687

Explanation:

Future Amount A= $7000

Rate r = 6% =0.06

Time t = 4

Compounded Weekly = n= 52

We need to find Principal Amount P

The formula used is:
`A=P(1+(r)/(n))^(n*t)`

Putting values and finding P

`A=P(1+(r)/(n))^(n*t)\\7000=P(1+(0.06)/(52))^(4*52)\\7000=P(1.001)^(208)\\7000=P(1.231)\\P=(7000)/(1.231) \\P=5687`

So, The investment required is: $5687