Enrique invests 60,000 pesos at 3.7% p.a. compounded annually. Find the value of his investments after 6 years.
We're suppose to use the calculator TVM solver.
I got 62220
60,000 * 1.037^6 = 60,000 * 1.243576591 = 74,614.60
62220 Is just ONE year.
Ohh ok thank you
Do you know how to do this question using the calculator tho?
I don't know what values to put for P/V and C/Y and N=
To find the value of Enrique's investments after 6 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the amount of money after the specified time period
P = the principal amount (initial investment)
r = annual interest rate (expressed as a decimal)
n = the number of times that interest is compounded per year
t = the number of years
In this case, Enrique invested 60,000 pesos at an annual interest rate of 3.7%, compounded annually. So we have:
P = 60,000 pesos
r = 0.037 (3.7% expressed as a decimal)
n = 1 (compounded annually)
t = 6 years
Using the formula, we can calculate the value of the investment:
A = 60,000(1 + 0.037/1)^(1*6)
A = 60,000(1 + 0.037)^(6)
A = 60,000(1.037)^(6)
A ≈ 62,220 pesos
So the value of Enrique's investments after 6 years is approximately 62,220 pesos.
To solve this problem using a financial calculator or TVM solver:
1. Input the following values:
- PV (present value or principal amount): -60000 (negative sign indicates cash outflow)
- I/Y (interest rate per compounding period): 3.7
- N (number of compounding periods): 6
- PMT (payment per compounding period): 0 (since it's not mentioned in the problem)
- FV (future value or final amount): ?
2. Solve for FV. Press the corresponding button on the calculator to get the result, which should be approximately 62220 (depending on the calculator and setup).
Please note that different financial calculators or TVM solvers may have variations in button labels or input format. However, the general principles remain the same.