14. All phone numbers consist of a three-digit area code, a three-digit exchange, and then a four-digit number. A town uses the
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Answer:
The amount needed as a one-time deposit to earn $7,500 in 3 years is <em>$4388.17</em>
Step-by-step explanation:
<u>Basic Finance Formulas </u>
One of the most-used formulas to compute present and future values is
Where FV is the future value, PV is the present value, r is the interest rate and n is the number of periods. It's vital to keep in mind that r and n must be referred to the same compounded time, e.g. r is compounded monthly and n is expressed in months
The question requires to compute the PV needed as a one-time deposit to earn a future value of $7,500 in 3 years at a 1.5% rate compounded monthly.
FV=7,500
r=1.5%=0.015
n=3*12=36 months
We converted n to months because r is compounded monthly . The formula
must be managed to make PV isolated
Answer: The amount needed as a one-time deposit to earn $7,500 in 3 years is $4388.17