Financial Math & annuity

Mathematics
Tutor: None Selected Time limit: 1 Day

What sum deposited today at 5% compounded annually for 8 years will provide the same amount as $1000 deposited at the end of each year for 8 years at 6% compounded annually?

Aug 22nd, 2015

Thank you for the opportunity to help you with your question!

I = PRT 

A = P+PRT = P(1+RT)  simple intrest 

compound interest = P (1+R)^t

according to formula 

      P(1+R1t1)   = 1000( 1+R2) ^t

  P(1 + 5*8/100)   = 1000( 1+6/100)^8

 P* 1.4    = 1593.848

P =  $1138.46


Please let me know if you need any clarification. I'm always happy to answer your questions.
Aug 22nd, 2015

If you will not understand the formula let me know 

Aug 22nd, 2015

Are you studying on the go? Check out our FREE app and post questions on the fly!
Download on the
App Store
...
Aug 22nd, 2015
...
Aug 22nd, 2015
Dec 3rd, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer