1. Mark is planning on making an investment in a new computer system. He wants t
ID: 2461450 • Letter: 1
Question
1. Mark is planning on making an investment in a new computer system. He wants to know how much he must invest to have $9,000 in 4 years if the interest rate is 5% per year?
2. Harlan Fuller needs $2,000 in 7 years. What amount must he invest in a 6% savings bond?
d. $1,330.12
Please show your work.
a. $10,939.59 b. $2,479.41 c. $7,404.30 d. $7,826.832. Harlan Fuller needs $2,000 in 7 years. What amount must he invest in a 6% savings bond?
a. $8,200.40 b. $9,533.08 c. $1,425.98d. $1,330.12
Please show your work.
Explanation / Answer
1. C. 7404.30
Present value = . Future value / ( 1+ rate)time
9000 / (1.05)4 = 9000 / 1.2155 = $7404.30
2. D. 1330.12
Appying the above formula
Pv = 2000 / (1.06)7
= 2000/ 1.5036
=$1330.14
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