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Can you please show me how we get the number, 1.242381   In this sum , A = $ 2,500 P = ? Time = 4 years = 4 * 2 = 8 half years Rate of interest = 5.5/ 2 = 2.75% compounded semi annually A = P (1+r/100)t 2,500 = P (1+2.75/100)8 2,500 = P (1.242381) 2,500/1.242381 = P P = $ 2,012.26 Hence, amount invested now is $ 2,012.26.

Can you please show me how we get the number, 1.242381   In this sum , A = $ 2,500 P = ? Time = 4 years = 4 * 2 = 8 half years Rate of interest = 5.5/ 2 = 2.75% compounded semi annually A = P (1+r/100)t 2,500 = P (1+2.75/100)8 2,500 = P (1.242381) 2,500/1.242381 = P P = $ 2,012.26 Hence, amount invested now is $ 2,012.26.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Can you please show me how we get the number, 1.242381

 

In this sum ,

A = $ 2,500

P = ?

Time = 4 years = 4 * 2 = 8 half years

Rate of interest = 5.5/ 2 = 2.75% compounded semi annually

A = P (1+r/100)t

2,500 = P (1+2.75/100)8

2,500 = P (1.242381)

2,500/1.242381 = P

P = $ 2,012.26

Hence, amount invested now is $ 2,012.26.

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