Question #38cca

1 Answer
Mar 23, 2017

P~~$8848.59 to 2 decimal places

Explanation:

Annual interest is 1.5/100 split this into quarterly then it is 1.5/400 interest for each quarter. As 4xx1.5/400=1.5/100

Total time span is 15 months. That is 1 year 3 months. So in quarters this is the same time span as 5 quarterly cycles

Let the initial sum (principle sum) be P

Then we have:" "P(1+1.5/400)^5=$9015.75

P(401.5/400)^5=$9015.75

P=$9015.75 -:(401.4/400)^5

P=$9015.75 xx(400/401.4)^5 ~~$8848.5899...

P~~$8848.59 to 2 decimal places