math teachers..accountants..... smart people...help with homework pls

Dar

Crowing
11 Years
Jul 31, 2008
5,929
28
251
My son is cramming at the last minute he has math that is due on Monday.... I suck at math (well this stuff anyway)

heres the question.... well there are a couple..

1) Adrian won $10,000 in the lottery. He has decided to spend some of the money and save the rest. Adrian wants the money he saves to grow to his original winnings in 7 years. He can invest the money at 4% per year, compounded monthly. How much money must Adrian invest?

2)Calculate the present value of each investment.

a) $46000 due in 7 years, if the interest is calculated at 5% per year

b) $3600 due in 12 years at 1% per year, compounded semi monthly


I dont remember how to do this stuff... I was able to help with he other stuff but I cant find formulas for these in his text

any help would be great. .. I am a visual learner.... so you cant just explain it in writing.. i need to see the problem solved with steps... thanks
 

Dar

Crowing
11 Years
Jul 31, 2008
5,929
28
251
Quote:
what grade is he in???????

11.. I dont feel silly now...
 
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Matthew3590

Songster
8 Years
Apr 10, 2011
2,085
19
178
Middle, TN
Sounds like algebra 2. I might be some help if I can find my book. We did some of the formulas for compounded continuously and other methods.

I took algebra 2 freshman year. SO it is still iffy on me.
 
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animalsRawesome

Songster
8 Years
Apr 12, 2011
887
11
146
Not 100 percent sure, but here goes:

A= P(1+r/n)^nt
10,000= P (1+.04/12)^12*7
10,000= P(1.00333333)^84
10,000= 1.323P
P=7558.6

Thats what I got. Do you have the answer to know if I did it correctly?
 

HeatherLynn

Songster
10 Years
May 11, 2009
2,045
38
234
Kentucky, Cecilia
I did something similar. a=p(1+r)n
10,000=(10,000-x)(1+.04)7th power
10,000=(10,000-x)(1.316)
10,000=13160-1.316x
1.316x=3160
x=2401.22
x being the amount he spent and did not invest

10,000-2401.22= 7598.78

I popped this into a compounding interest calculator and came up with investing 7598.78 for 7 years at 4% interest compounded monthly is 10049.49. Close but not perfect. I have tried six ways to Sunday to get exactly 10000 back and I cannot make it happen.

http://www.webmath.com/compinterest.html This was a pretty handy website. gives a worked out explanation of what the calculator did to figure that end figure up.


animals your amount comes to $9996.35. You got much closer than I could. I gotta be doing something off just not sure what yet.
 
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Dar

Crowing
11 Years
Jul 31, 2008
5,929
28
251
book says answer is $7567.38

and this is what confuses the jeebers out of me.. animal comes closest to the $10,000 but Heather comes closest to the book answer....
 
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