Answer:
Step-by-step explanation:
Deposit=?
Given that
Annual rate is 10% =0.1
r=0.1
Amount A=$60,000
t=10years
The formula for compound interest, including principal sum, is:
A = P (1 + r/n)^(nt)
Where,
A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per unit
n=12months
t = the time the money is invested or borrowed.
So,
A = P (1 + r/n)^(nt)
60,000=P(1+0.1/12)^(12×10)
60,000=P(1+0.008333)^120
60,000=P(1.008333)^120
60,000=P× 2.707
Then, P=60,000/2.707
P=$22,164.418
So, he should have deposit $22,164.418 to yield an amount of $60,000 in ten years time at a rate of 10% compounded annually
Answer: $23133 must be deposited.
Step-by-step explanation:
We would apply the formula for determining compound interest which is expressed as
A = P(1+r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
A = $60000
r = 10% = 10/100 = 0.1
n = 1 because it was compounded once in a year.
t = 10 years
Therefore,.
60000 = P(1 + 0.1/1)^1 × 10
60000 = P(1.1)^10
60000 = 2.5937P
P = 60000/2.5937
P = $23133
