Explanation Given Information: An investment to have $ 50 , 000 in 5 1 2 years for home improvement projects if the Bank of Aventura is paying 8 % interest compounded quarterly. Formula used: Compounding period can be defined as the duration or length of time from one interest payment to the next. If an investment made for 4 years at 6 % compounded annually (once per year) then it would have four compounding period which can be calculated by formula given below: Compounding periods = Term of investments ( years ) × m Here, m is the period per year. The interest rate per period can be calculated by dividing the annual, or nominal, rate by the number of periods per year, Interest rate per period = Nominal rate Period per year The present value (principal) can be calculated by the formula given below: Principal = Table factor × Compound amount In Present value table 11-2, the table factor is the intersection of the rate-per-period column and the number-of-periods row is the present value of $ 1 at compound interest. The compound interest can be calculated by the formula given below: Compound interest = Compound amount − Principal Steps for using the present value table: Step 1: Along the top row for finding the interest rate per period. Step 2: See below that column of the row corresponding to the number of periods. Step 3: The table factor found at the intersection of the rate-per-period column and the number-of-periods row is the present value of $ 1 at compound interest

Contemporary Mathematics For Business & Consumers, Loose-leaf Version

8th Edition

ISBN: 9781305867185

Author: Robert Brechner, Geroge Bergeman

Publisher: South-Western College Pub

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Chapter 11, Problem 22AT

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To calculate: The present value (principal) for an investment to have $50,000 in 512 years for home improvement projects if the Bank of Aventura is paying 8% interest compounded quarterly using the table 11−2. Also, round your answer to the nearest cent.

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Chapter 11, Problem 21AT

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Chapter 11 Solutions

Contemporary Mathematics For Business & Consumers, Loose-leaf Version

Ch. 11.I - Gail Parker invested $10,000 at 6% interest...Ch. 11.I - Jenny Chao invested $20,000 at 6% interest...Ch. 11.I - Prob. 3TIE Ch. 11.I - Jill Quinn invested $7,000 in a certificate of...Ch. 11.I - Prob. 5TIE Ch. 11.I - Prob. 1RE Ch. 11.I - For the following investments, find the total...Ch. 11.I - For the following investments, find the total...Ch. 11.I - Prob. 4RE Ch. 11.I - Prob. 5RE

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The present value (principal) for an investment to have $ 50 , 000 in 5 1 2 years for home improvement projects if the Bank of Aventura is paying 8 % interest compounded quarterly using the table 11 − 2 . Also, round your answer to the nearest cent.

Solution Summary: The author calculates the present value (principal) for an investment to have 50,000 in 512 years for home improvement projects if the Bank of Aventura is paying

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To calculate: The present value (principal) for an investment to have $50,000 in 512 years for home improvement projects if the Bank of Aventura is paying 8% interest compounded quarterly using the table 11−2. Also, round your answer to the nearest cent.

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