1) Determine the present value, P, you must invest to have the future value, A,
ID: 3121264 • Letter: 1
Question
1) Determine the present value, P, you must invest to have the future value, A, at simple interest rate r, after time t. Round your answer to the nearest dollar:
A = $8567.50, r = 14.5%, t = 20 months
2) Determine the periodic deposit. Round to the nearest cent. Periodic Deposit: $? at the end of each month, Rate: 7.5% compounded monthly, Time: 3 years, Financial Goal: $24,000
3) The scores on a drivers test are normally distributed with a mean of 100. Find the score that is 2.5 standard deviations above the mean, if the standard deviation is 18.
4) Use a truth table to determine whether the following symbolic form of the argument is valid or invalid:
(~p q) (q r)
~q r
p q
Explanation / Answer
1) A = $8567.50, r = 14.5%, t = 20 months
Simple interest formula: A = P(1 + rt) where P is the Principal amount of money to be invested at an Interest Rate R% per period for t Number of Time Periods.
First, converting R percent to r in a decimal
r = R/100 = 14.5%/100 = 0.145 per year,
putting time into years for simplicity,
20 months ÷ 12 months/year = 1.67 years,
then, solving our equation
P = 8567.5 / ( 1 + (0.145 × 1.67)) = 6897.3151390734
P = $ 6,897.32
The principal investment required to get
a total amount, principal plus interest, of $ 8,567.50
from simple interest
at a rate of 14.5% per year
for 1.67 years (20 months)is $ 6,897.32.
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