Business and Finance

User Generated

fyvzpnfu50

Business Finance

Description

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.

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Explanation & 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


Anonymous
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