Finance

For the following investment, calculate the present value (principal) and the compound interest. Use Table 11-2. Round your answers to the nearest cent.

Click here for Table 11-2

Compound Amount $130,000

Term of Investment 12 yrs

Nominal Rate 11%

Interest Compounded (annually)

Present Value $________

Compound Interest $________

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  1. same type again

  2. Po(1+r)^n = 130,000.
    Po = present value.
    r = 0.11 = annual % rate.
    n = 12 = the number of compounding periods.

    I = P-Po = 130,000-Po.

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