Find the periodic payment which will amount to a sum of 17000 if an interest rate 5 % is compounded annually at the end of 12 consecutive years.

Question

Mathematics

Zoey Clements

10 December, 13:19

Find the periodic payment which will amount to a sum of 17000 if an interest rate 5 % is compounded annually at the end of 12 consecutive years.

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Answers (1)

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Ashlyn · Answer 1

In 17 years, you will have $38,964.31

Formula:

A = P (1 + r/n) ^ (nt)

Where:

A = the future value of the investment/loan, including interest

P = the principal investment amount (the initial deposit or loan amount)

r = the annual interest rate (decimal)

n = the number of times that interest is compounded per year

t = the number of years the money is invested or borrowed for