Jeffrey is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 4 years. If the interest rate on the account is 2.15% compounding annually, what is the present value of the investment? (2 points)
a
$7,587.82
b
$5,033.72
c
$8,261.72
d
$15,252.94

Question

Jeffrey is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 4 years. If the interest rate on the account is 2.15% compounding annually, what is the present value of the investment? (2 points)
 a
$7,587.82
 b
$5,033.72
 c
$8,261.72
 d
$15,252.94

supie · Answer

$\text{Ok so we have to use the Compound Interest Formula:}$
$\LARGE A = P * (1 + (\frac rn))^{(n*t)}$
Where 
```
>A~total amount
>P~Principal 
>r~annual interest rate 
>~compounded/year
>t~time
```
So we have to know all of those, then plug in the numbers. 
Then solve

supie · Answer

We're solving to find the `Total amount/A`
So we don't know that yet. 
"He plans to invest $2,000" 
So `P=2000` 
"the interest rate on the account is 2.15% " 
`r=2.15`
"every year for 4 years" 
`n=1 year` 
`t=4 years`
So now you plug in the numbers to the compound interest formula, $A = P * (1 + (r/n))^{(n*t)}$, then solve.