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MATH

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Rico can invest money at 10%/a compounded quarterly. He would like
$15 000 in 10 years. How much does he need to invest now?

  • MATH - ,

    PV = A( 1+i)^n
    =15,000(1+0.025)^-40
    =$5586.46

  • MATH - ,

    The balance gets multiplied bu 1.025 forty times.

    X*(1.025)^40 = 15,000.
    2.685063838X = 15,000.

    X = $ 5586.46

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