QuestionJune 1, 2025

Your bank will pay you an interest rate of .112 percent per week. You want to have 23,500 in 8 years. How much will you have to deposit today? Assume 52 weeks per year. Multiple Choice 14,941.51 15,079.26 22,171.17 14,751.45 14,948.13

Your bank will pay you an interest rate of .112 percent per week. You want to have 23,500 in 8 years. How much will you have to deposit today? Assume 52 weeks per year. Multiple Choice 14,941.51 15,079.26 22,171.17 14,751.45 14,948.13
Your bank will pay you an interest rate of .112 percent per week. You want to have 23,500 in 8 years. How much will you have to deposit
today? Assume 52 weeks per year.
Multiple Choice
 14,941.51
 15,079.26
 22,171.17
 14,751.45
 14,948.13

Solution
4.0(259 votes)

Answer

\14,948.13 Explanation 1. Convert annual interest rate to weekly The weekly interest rate is given as 0.112%. Convert it to a decimal: r = \frac{0.112}{100} = 0.00112. 2. Calculate total number of weeks Total weeks in 8 years: 8 \times 52 = 416 weeks. 3. Use Present Value formula Use the formula for present value: **PV = \frac{FV}{(1 + r)^n}**, where FV = 23500, r = 0.00112, and n = 416. 4. Compute Present Value Calculate: PV = \frac{23500}{(1 + 0.00112)^{416}}.

Explanation

1. Convert annual interest rate to weekly<br /> The weekly interest rate is given as 0.112%. Convert it to a decimal: $r = \frac{0.112}{100} = 0.00112$.<br /><br />2. Calculate total number of weeks<br /> Total weeks in 8 years: $8 \times 52 = 416$ weeks.<br /><br />3. Use Present Value formula<br /> Use the formula for present value: **$PV = \frac{FV}{(1 + r)^n}$**, where $FV = 23500$, $r = 0.00112$, and $n = 416$.<br /><br />4. Compute Present Value<br /> Calculate: $PV = \frac{23500}{(1 + 0.00112)^{416}}$.
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