Question

1.What amount of money will accumulate to $5,996.87

in 277 days at 2.8%?

​(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as​ needed.)

On September​ 30, an inn invested ​$26,350 in a​ short-term investment of 209 days. An investment of this length earns 1.8​% p.a. How much will the investment be worth at​ maturity?

(Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as​ needed.)

Answer 1

1.What amount of money will accumulate to $5,996.87 in 277 days at 2.8%?

PV = FV/(1 + r)^n

Daily interest rate = (1 + 0.028)^(1/365) - 1 = 0.00007566085401

n = 277

PV = 5,996.87/(1 + 0.00007566085401)^277

PV = 5,872.499795323

PV = $5,872.50

2. On September​ 30, an inn invested ​$26,350 in a​ short-term investment of 209 days. An investment of this length earns 1.8​% p.a. How much will the investment be worth at​ maturity?

FV = PV * (1 + r)^n

Monthly interest rate, r = (1 + 0.018)^(1/365) - 1

r = 0.0000488776825

n = 209

FV = 26,350 * (1 + 0.0000488776825)^209

FV = $26,620.549655904

FV = $26,620.55