math

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If I need $25,000 in 4 years. Waht amount must i invest today if the investment earns 12% compounded semiannualy?

  • math -

    25000=P(1+.06)^8

    take log of each side
    log 25000=logP+8log(1.06)
    4.40=logP+.202
    P= antilog(4.198)=10^4.198=15776
    you can work it out more accurately with your calculator.

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