Business Finance
Business and Finance

Question Description

I’m trying to learn for my Business class and I’m stuck. Can you help?

How much should I set aside now to buy new equipment that cost $7200 in one year? The current interest rate is 0.9% annually, compounded annually. The amount of money to be set aside is? Round to nearest cent as needed.

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

Let the amount be x

Interest rate = .9% = 0.009

The amount at the end of 1 year = x*(1+.009) =7200

x =7200/(1.009) =7135.778 = 7135.78

madhavant (2757)
Rice University

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