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Laura would like to have $10,000 in a year and a half. How much would she have to invest right now to obtain this amount? Consider an annual return of 13%

Sagot :

Samuelonum1idn

The principal investment required to get a total amount of $10,000.00 from compound interest at a rate of 13% per year compounded 1 times per year over 1.5 years is $8,324.96.

Answer:

P = $8,324.96

Compound Interest

Given Data

Final Amount A = $10,000

Time t = 1 year 6 months

Rate = 13%

Calculation Steps:

First, convert R as a percent to r as a decimal

r = R/100

r = 13/100

r = 0.13 per year,

Then, solve the equation for P

P = A / (1 + r/n)^nt

P = 10,000.00 / (1 + 0.13/1)^(1)(1.5)

P = 10,000.00 / (1 + 0.13)^(1.5)

P = $8,324.96

Learn more about compound interest here:

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