Calculating deposit needed You put
10,000
in an account earning
6%.
After
4
years, you make another deposit into the same account.
Four
years later (that is,
8
years after your original
$10,000
deposit), the account balance is
$21,000.
What was the amount of the deposit at the end of year
4?
The amount of the deposit at the end of year
4
is
$___.
(Round to the nearest cent.)
We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.
21000=10000*(1.06)^8+P*(1.06)^4
21000=(10000*1.593848075)+P*(1.06)^4
P=(21000-15938.48075)/1.06^4
=$4009.20(Approx).
Calculating deposit needed You put 10,000 in an account earning 6%. After 4 years, you make...