Question

Find the present value of the deposit. In order to have $9000 at 10% compounded monthly for 4 years.. Need help with this.. at least the formula.

Thanx!! ;)

Answer 1

the formula is

\[A = P(1 + r)^n\]

A = future value, P = Principal (amount invested) r = interest rate as a decimal

n = number of time periods..

is the interest rate 10% per annum or 10% per month...?

Answer 2

\[9000=P(1+\frac{0.1}{12})^{(4\times 12)}=P(1.008333333)^{48}\]
Now solve to find P

Answer 3

why I got this answer $13,404.19? and the right is $6,042.89.
What I am doing wrong? Thanks!

Answer 4

@campbell_st is per month..

Answer 5

@rocal2 If you solve the equation that I posted you will get the correct answer. Do you have a problem with solving the equation?

Answer 6

Yes, I guess I am pluging something wrong.. What I am doing is 9000(1+0.1/12)^48.
It is this is correct?

Answer 7

well looking at the correct answer @kropot72 method is correct...

Answer 8

\[P=\frac{9000}{(1+\frac{0.1}{12})^{48}}\]

Answer 9

Yes I am agree with that.. I am pretty sure I am doing something wrong..

Answer 10

@kropot72 Got it now... thank you!!

Answer 11

You're welcome :)