Question
Asked Sep 2, 2019
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Use the present value formula to determine the amount to be invested​ now, or the present value needed.
 
The desired accumulated amount is$120,000 after
7 years invested in an account with
4% interest compounded
quarterly.
Whats the amount to be invested now or the present value needed? (round to the nearest cent)
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Expert Answer

Step 1

Given information:

Accumulated amount (A)= $120,000

Rate of interest (r) = 4% = 0.04

Number of years (t) = 7

Compounded quarterly (n) = 4

Step 2

Compound interest...

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nt A-H2) A P 1+ where A is the amount of money accumulated after n months, including interest

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