Question

question 17 (4 points)
how much money should be deposited today in an account that earns 4.91% compounded daily so that it will accumulate to $9,700 in 22 years?
use this formula:
$pv=\frac{fv}{(1 + \frac{r}{n})^{nt}}$
enter the dollar amount rounded up to the nearest cent.
your answer:
answer

Explanation:

Step1: Identify values

$FV = 9700$, $r=0.0491$, $n = 365$, $t = 22$

Step2: Substitute values into formula

$PV=\frac{9700}{(1 +\frac{0.0491}{365})^{365\times22}}$

Step3: Calculate exponent

$365\times22 = 8030$
$\frac{0.0491}{365}\approx0.0001345205$
$1+\frac{0.0491}{365}\approx1.0001345205$
$(1 +\frac{0.0491}{365})^{8030}\approx2.937497$

Step4: Calculate present - value

$PV=\frac{9700}{2.937497}\approx3302.05$

Answer:

$3302.05$