Question

How much must you invest at one time in order to accumulate $20,000 in 15 years at 5% annual interest? S = A/[(1+ r)n]
A. $5,023.07
B. $9,620.34
C. $10,023.07
D. $15,075.22

Answer 1

Just plug the numbers into the formula and calculate S

A = 20000, r = 0.05, n = 15. Put it in S = A/[(1+ r)^n]

Answer 2

i cant get it can u please show me the process ?

Answer 3

S = 20000 / (1 + 0.05)\[\Large S = \frac{ 20000 }{ (1 + 0.05)^{15} } = \frac{ 20000 }{ 1.05^{15} } = 9620.34\]

Answer 4

in the second process you multiple 1.05 times 15 and then you divide it be 20000 right

Answer 5

Ignore the first line in my reply above. I forgot to delete it.

1.05 is not multiplied by 15. 1.05 is raised to 15. 15 is the exponent.
\[\Large 1.05^{15} = 2.0789\]
\[\Large \frac{ 20000 }{ 2.0789 } = 9620.34\]

Answer 6

thank you ranga you have been really helpful:)

Answer 7

you are welcome.