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Present Value question

 
 
Reply Sat 7 Jan, 2012 03:57 pm
On your seventieth birthday, you learn that your grandma, bless her soul, deposited $50.00 for you on the
day of your birth in a savings account bearing 5 percent interest. How much is in the account?

I know the formula is PV = FV /(1+r)^n

So I did PV = 50/(1+.05)^70 and I get $1.64.

This number seems a little small - is it right?
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Type: Question • Score: 1 • Views: 2,720 • Replies: 2
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engineer
 
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Reply Sat 7 Jan, 2012 04:39 pm
@brokencdplayer,
brokencdplayer wrote:

On your seventieth birthday, you learn that your grandma, bless her soul, deposited $50.00 for you on the
day of your birth in a savings account bearing 5 percent interest. How much is in the account?

I know the formula is PV = FV /(1+r)^n

So I did PV = 50/(1+.05)^70 and I get $1.64.

This number seems a little small - is it right?

You know Present value = $5 and you want to know Future Value so you multiply instead of divide.
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mackllinvinger
 
  -1  
Reply Fri 31 Aug, 2012 11:45 pm
nice questions.
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