question archive Jana is saving to pay off an obligation of $90,000 which will be due in nine years
Jana is saving to pay off an obligation of $90,000 which will be due in nine years
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Jana is saving to pay off an obligation of $90,000 which will be due in nine years. If the investor is earning 9.5% effective annual interest rate, how much must be deposited as a single deposit now to meet this obligation? If she use simple interest? * (2 Points) $ 48,517.520 $9,132.42 $48,515.520 9,130.42 non of the above
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Let us assume that saving amount is = P
Interest rate on saving "I" = 9.5%
Loan obligation =90000
Time period "T" = 9 year
After nine year Saving + Interest earned on saving should be equal to loan obligation ($90000) using simple interest calculation.
So
Simple interest = (P × I × T)
Loan obligation = (P + (P × I × T))
90000 = (P + (P × 9.5% × 9))
P = $ 48517.5202
So savings amount "P" = $ 48517.520
