I NEED HELP QUICKLY PLEASE PLEASE PLEASE

John wants to have $2 000 in 3 years. The current rate of return for a high interest savings

account is 2.8%, compounded annually. The money, P dollars, that John must invest now is given by the formula P initial investment = 2 000 (1.028) -3, where the exponent of the power is the time, in years.

AHow much must John invest now to have $2 000 in 3 years?

BAssuming the interest rate remains consistent, how much money will John have in 5 years

if he doesn’t touch the investment after the initial 3 years? Hint: The original formula will

have to change.

Ayou plug in to a calculator, which will give 1840.986 so you need to round up to 1840.99. if you truncate it to .98 then he won't reach 2000 in 3 years

b. for this one if you look at the equation given to find the principle it is principle = result (1+rate) ^ -time

if you re arrange this you get result=principle (1+rate)^time
so result = 1840.99(1.028)^5
= 2113.57

Answer Link

chisnau chisnau · Answer 2 · 2019-09-12T12:53:56-04:00

Answer:

The compound interest formula is :

$A=p(1+\frac{r}{n})^{nt}$

Now, we have to find p.

A = 2000

r = 2.8% or 0.028

n = 1

t = 3

Putting the values in formula we get;

$2000=p(1+\frac{0.028}{1})^{3}$

=> $2000=p(1.028)^{3}$

=> $2000=p(1.08637)$

=> $2000/1.08637=p$

So, p = $1840.99 rounded to $1841.

Part A: John should invest $1841 now to have $2000 in 3 years.

------------------------------------------------------------------------------------------------

Part B:

Now p = 1841

r = 0.028

n = 1

t = 5

$A=1841(1+\frac{0.028}{1})^{5}$

=> $A=1841(1.028)^{5}$

=> $A=1841(1.1480)$

A = $2113.46

Hence, John will have $2113.46 in 5 years.