# Initial Investment Present Value Formula

**Question description**

Read the following instructions in order to complete this discussion, and review the example of how to complete the math required for this assignment:

Think of something you want or need for which you currently do not have the funds. It could be a vehicle, boat, horse, jewelry, property, vacation, college fund, retirement money, or something else. Pick something which cost somewhere between $2000 and $50,000.

On page 270 of *Elementary and Intermediate Algebra* you
will find the “Present Value Formula,” which computes how much money you
need to start with now to achieve a desired monetary goal. Assume you
will find an investment which promises somewhere between 5% and 10%
interest on your money and you want to purchase your desired item in 12
years. (Remember that the higher the return, usually the riskier the
investment, so think carefully before deciding on the interest rate.)

Present Value Formula page 270

The present value *P* that will amount to *A* dollars after *n* years with interest compounded annually at annual interest rate *r* is given by the formula P=A (1+r)^{ ^}-n

- State the following in your discussion:

- The desired item

- How much it will cost in 12 years

- The interest rate you have chosen to go with from part 2

- The desired item
- Set up the formula and work the computational steps one by one,
explaining how each step is worked, especially what the negative
exponent means. Explain what the answer means.

- Does this formula look familiar to any other formulas you are aware of? If so, which formula(s) and how is it similar?

- Incorporate the following five math vocabulary words into your discussion. Use
**bold**font to emphasize the words in your writing (**Do not write definitions for the words; use them appropriately in sentences describing your math work**.):

- Power

- Reciprocal

- Negative exponent

- Position

- Rules of exponents

- Power

** Category:**
`Algebra`

## Tutor Answer

Brown University

1271 Tutors

California Institute of Technology

2131 Tutors

Carnegie Mellon University

982 Tutors

Columbia University

1256 Tutors

Dartmouth University

2113 Tutors

Emory University

2279 Tutors

Harvard University

599 Tutors

Massachusetts Institute of Technology

2319 Tutors

New York University

1645 Tutors

Notre Dam University

1911 Tutors

Oklahoma University

2122 Tutors

Pennsylvania State University

932 Tutors

Princeton University

1211 Tutors

Stanford University

983 Tutors

University of California

1282 Tutors

Oxford University

123 Tutors

Yale University

2325 Tutors