> #mathematics , #personal-finance > Amount that must be interested 6%p.a.compounding annually to have K4500 at the end of 5 years is?
Jun 6

# Amount that must be interested 6%p.a.compounding annually to have K4500 at the end of 5 years is?

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Jun 6
To find the amount that must be invested at 6% p.a. compounding annually to have K4500 at the end of 5 years, we can use the formula for compound interest:

A = P(1 + r/n)^(nt)

Where:
A = the amount of money accumulated after n years, including interest
P = the principal amount (the initial amount of money)
r = the annual interest rate (in decimal form)
n = the number of times that interest is compounded per year
t = the number of years the money is invested for

In this case, we want to find the principal amount (P) that will result in an amount of K4500 after 5 years at an interest rate of 6% compounded annually. So we have:

A = K4500
r = 0.06
n = 1
t = 5

Plugging these values into the formula, we get:

K4500 = P(1 + 0.06/1)^(1*5)
K4500 = P(1.06)^5
K4500 = P(1.338225)

Now, we can solve for P:

P = K4500 / 1.338225
P ≈ K3357.20

Therefore, the amount that must be invested at 6% p.a. compounding annually to have K4500 at the end of 5 years is approximately K3357.20.
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Jun 6
Formula:

PV = FV / (1 + r)^n

where:
- PV = present value (amount to be invested)
- FV = future value (K4500)
- r = annual interest rate (6%)
- n = number of years (5)

Calculation:

PV = 4500 / (1 + 0.06)^5
PV = 4500 / 1.3382256
PV ≈ K3364.43

Therefore, the amount that must be invested at 6% p.a. compounding annually to have K4500 at the end of 5 years is approximately K3364.43.
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