Financial math MYP Present value

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Financial math MYP Present value

Postby Lucas » Fri May 03, 2013 6:27 am

MYP Math, Financial Mathematics, Compound Interest, Present value

How can we calculate the amount to be deposit into an account to collect $140,000 at the end of 8 years if the account is paying 6% per annum compounded every month?

Thanks
Lucas
 
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Re: Financial math MYP Present value

Postby nicole » Fri May 03, 2013 6:33 am

MYP Math, Financial Mathematics, Compound Interest, Present value

The general compounding formula is:


Where F is the future value of the investment (=$140,000), P the principal, r is the interest rate per compound period () and n is the number of compounding periods (=8*12=96 months).
Therefore




Hope these help!
nicole
 
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Re: Financial math MYP Present value

Postby Lucas » Fri May 03, 2013 6:35 am

Thanks Nicole!!
Lucas
 
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