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March 28, 2017

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$2700 left in an account paying 4% interest would be worth how much today?

  • Math - ,

    Scott, you are not giving us anything like the information required for this problem or the other one.
    Compound interest?
    How often? (monthly, continuous, quarterly)
    How long?

    In your earlier problem you gave us no idea what the interest rate was or how often it was compounded. Are you making these problems up yourself?

  • Math - ,

    It is not a school question. It is a real life question.
    So let's assume the interest averaged 4 % compounded daily over the 27 years.

  • Math - ,

    future value = present value e^yr
    where y = 27 years
    r = .04 yearly interest rate
    e^1.08 = 2.945
    so
    2700 * 2.945 = 7950.63

  • Math - ,

    calculator here:

    http://www.moneychimp.com/articles/finworks/continuous_compounding.htm

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