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?

Question

asked Nov 9, 2021 85.5k views

1 Answer

Sio · Answer 1 · 2021-11-15T10:25:40+0000

Answer:

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