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

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