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March 30, 2017

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The present value P that will amount to A dollars in n years with interest compounded annually at annual interest rate r, is given by P = A (1 + r) -^n. Find the present value that will amount to $50,000 in 20 years at 8% compounded annually.

  • present value - ,

    P = 50000(1.08)^-20
    = ......

    On your calculator
    enter 50000 x 1.08 YX 20 ± =
    to get 10,727.41

  • present value - ,

    122222

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