What amount must he invest today if his investment earns 8% compounded annually? What amount must he invest if his investment earns 8% annual interest compounded quarterly? (Round factor values to 5 decimal places, e. g. 1.25124 and final answers to 0 decimal places, e. g. 458,581.)

Question

Business

Kody Galvan

10 January, 04:51

What amount must he invest today if his investment earns 8% compounded annually? What amount must he invest if his investment earns 8% annual interest compounded quarterly? (Round factor values to 5 decimal places, e. g. 1.25124 and final answers to 0 decimal places, e. g. 458,581.)

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Answers (1)

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Callie White · Answer 1

Compounded annually:

24820 = x * (1.08^3) = 1.259712x

x = 24820/1.259712 = $19703

Compounded quarterly:

24820 = x * (1.02) ^12 = 1.26824x

x = 24820/1.26824 = $19570

Explanation:

I hope you can understand better and no need for further explanation.