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A businessman wants to have sh. 40000 in 8 years. How much money must he invest now if the rate of interest is 7.5% p.a....

A businessman wants to have sh. 40000 in 8 years. How much money must he invest now if the rate of interest is 7.5% p.a. compound interest?

Answers

Using the compound interest formula
A = sh. 40000
r= 7.5% per period
n = 8 interest period
therefore P(1 +7.5/100)^8 = 40000
P(1.075)^8 = 40000
P = 40000/(1.075)^8
P= sh. 22428.09

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joseph rimiru answered the question on November 16, 2017 at 19:08

Next:  Find the accumulated amount if sh. 40000 is deposited for 4 ½ years at 10% p.a. compound interest.
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