Finite Math and Applied Calculus (6th Edition)

Published by Brooks Cole
ISBN 10: 1133607705
ISBN 13: 978-1-13360-770-0

Chapter 2 - Section 2.2 - Compound Interest - Exercises - Page 142: 13

Answer

$\$ 1,227.74$

Work Step by Step

The present value of an investment earning interest at$\\$ an annual rate of $r=-5\%=-0.05\ \ \ \ $(depreciation=negative rate) $\\$ compounded m$=1$ times per year $\\$ for a period of t$=4$ years,$\\$ with future value FV$=1000$ is$\\\\$ $ PV=\displaystyle \frac{FV}{(1+\frac{r}{m})^{mt}}=\frac{1000}{(1+\frac{-0.05}{1})^{1(4)}}\approx$1227.73766315$\\\\$ rounded to the nearest cent: $\$ 1,227.74$
Update this answer!

You can help us out by revising, improving and updating this answer.

Update this answer

After you claim an answer you’ll have 24 hours to send in a draft. An editor will review the submission and either publish your submission or provide feedback.