Question

If $5,000 is invested now, $3,000 two years from now, and $4,000 four years from now at an interest rate of 6% compounded annually, what will be the total amount in 8 years?

Answer 1

As Compound interest amount is given by :-

where A is amount

P is the value at the time

r is interest rate

n is number of years

As,

$5000 is invested now so n = 8

$3000 is invested 2 years from now so n = 8-2 = 6

$4000 is invested 4 years from now so n = 8-4 = 4

Now, r = 6% = 0.06

So Total amount after 8 years is :-

Hence, Amount after 8 years is $17,274.7046

answered by: anonymous