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20 September, 15:26

Two years ago, Margo deposited $500 into a savings account. One year ago, she deposited an additional $300, and today she deposited $800. Which one of these is these is the correct formula for computing the value of these deposits today at a rate of 4 percent?

A. PV2 = 5500/1.042) + ($300/1.04) + $800

B. FV2 = (S500x 104) ($3001.04) $800

C. FV2 = ($500 x 1.04) + ($300 x1.04) + ($800 x 1.04)

D. FV2 = ($500 x 104) + $300 $800/1.04

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Answers (1)
  1. 20 September, 19:19
    0
    Answer: none is correct.

    Explanation:

    Given dа ta:

    2 years ago = $500

    1 year ago = $300

    Today = $800

    Solution:

    PV (presents value)

    = p * r * t

    Where:

    p = principal ($500, $300, $800)

    r = rate = 4%

    t = duration (time) (2years, 1 year and present).

    = ($500 * 2 * 0.04) + ($300 * 1 * 0.04) + $800

    = $40 + $12 + $800

    = $852

    PV = $500 + $300 + $852

    = $1,652.
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