Question

Cynthia Ogago is planning to make investment in a scheme

earning 10% interest rate and expects to receive ksh. 50,000
after 3 years. Advise her on how much she needs to invest now
in order to achieve these
O a. Ksh. 50,000
O b. Ksh. 66,550
O c. Ksh. 35,656
O d. Ksh. 37,566​

Answer 1

d. Ksh. 37,566​

Step-by-step explanation:

The $50,000 represent the future amount expected after 3 years.

the interest rate is 10%.

Implementing the formula A = P x ( 1+ r) ^n

A= $50,000

P= amount to invest

R=10% or 0.10

n=3 years

Ksh.50,000 = P x (1 + 0.10) ^ 3

Kshs.50,000 = P x (1.1) ^3

Kshs.50,000 = P x 1.331

P= Kshs50,000 / 1.331

P=Kshs.37,565.74

= Kshs. 37,566