The amount of money that needs to be deposited into an account to reach some future goal is called the present value. The following table gives the present value (to the nearest dollar) for an account that earns 10% compounded annually so that the account value will be $50,000 after intervals ranging from 1 to 7 years. Years Present value 1 $45,455 41,322 37,566 34,151 5 31,046 6 28,224 26,658 (a) Using x as the years and y as the present value (in dollars), develop an exponential model for these data. (Round your numerical values to four decimal places.) y = (b) Use the model to find the present value (to the nearest dollar) of this account for its value to be $50,000 after 13 years.
The amount of money that needs to be deposited into an account to reach some future goal is called the present value. The following table gives the present value (to the nearest dollar) for an account that earns 10% compounded annually so that the account value will be $50,000 after intervals ranging from 1 to 7 years. Years Present value 1 $45,455 41,322 37,566 34,151 5 31,046 6 28,224 26,658 (a) Using x as the years and y as the present value (in dollars), develop an exponential model for these data. (Round your numerical values to four decimal places.) y = (b) Use the model to find the present value (to the nearest dollar) of this account for its value to be $50,000 after 13 years.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:The amount of money that needs to be deposited into an account to reach some future goal is called the present value. The following table gives the present value (to the nearest dollar)
for an account that earns 10% compounded annually so that the account value will be $50,000 after intervals ranging from 1 to 7 years.
Years
Present value
1
$45,455
2
41,322
3
37,566
4
34,151
5
31,046
28,224
7
26,658
(a) Using x as the years and y as the present value (in dollars), develop an exponential model for these data. (Round your numerical values to four decimal places.)
y =
(b) Use the model to find the present value (to the nearest dollar) of this account for its value to be $50,000 after 13 years.
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