Narrative 11-1
Solve the following problems using either Tables 11-1 or 11-2 from your text. When necessary, create new table factors. (Round new table factors to five decimal places, round dollars to the nearest cent and percents to the nearest hundredth of a percent)
-Refer to Narrative in your text 11-1. You wish to have $16,500 in 6 years. How much should you invest now at 9% interest, compounded annually in order to have $16,500, 6 years from now?
A) $11,172.15
B) $6,661.54
C) $9,838.46
D) $27,672.15

Question

Quizplus · Accepted Answer

To find the present value, use the formula for compound interest: $ PV = \frac{FV}{(1 + r)^n} $. Here, $ FV = 16,500 $, $ r = 0.09 $, and $ n = 6 $. Calculating gives $ PV = \frac{16,500}{(1 + 0.09)^6} \approx 9,838.46 $.

Narrative 11-1 Solve the Following Problems Using Either Tables 11-1 or 11-2