Joey is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 3 years. If the interest rate on the account is 2.05% compounding annually, what is the present value of the investment? $4,180.20 $5,762.15 $5,891.08 $5,978.76

Question

Mathematics

Claire Snow

26 July, 09:43

Joey is saving up for a down payment on a car. He plans to invest $2,000 at the end of every year for 3 years. If the interest rate on the account is 2.05% compounding annually, what is the present value of the investment? $4,180.20 $5,762.15 $5,891.08 $5,978.76

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Victor Reeves · Answer 1

A=Annual amount=2000

i=annual interest=0.0205

n=number of years=3

Present value

=A ((1+i) ^n-1) / (i (1+i) ^n)

=2000 (1.0205^3-1) / (.0205 (1.0205^3))

=5762.15