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: 24

Answer

$\$ 565.82$

Work Step by Step

The future value of an investment of $\\\\$ PV=$5,000$ dollars $\\$ "earning" interest at an annual rate of$\\$ r=$-42\%=-0.42\ \ \ \ $(depreciation = negative rate)$\\$ compounded (reinvested) m$=1$ times per year$\\$ for a period of t$=4$ years is$\\$ $FV=PV(1+\displaystyle \frac{r}{m})^{mt}\\$ $=5,000(1+\displaystyle \frac{-0.42}{1})^{1\cdot 4}\approx$565.8248$\\$ rounded to the nearest cent: $FV=\$ 565.82$
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