Question 28ff9

Mar 13, 2016

€50,000

Explanation:

$1$. Rearrange the formula in terms of $P$.

$F = P {\left(1 + i\right)}^{t}$

$P = \frac{F}{1 + i} ^ t$

$2$. Substitute your known values into the formula. Note that the compounding period is one year.

P=(€88,578.05)/(1+0.1)^6

$3$. Solve for $P$.

color(green)(|bar(ul(color(white)(a/a)P=€50,000color(white)(a/a)|)))

$\therefore$, €50,000 will have a future value of €88,578.05 in $6$ years at 10%# per annum.