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find the rate compounded if annually 45,000 is the present value of 75,000 due in 5 years? ​

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Hanimeyago

ANNUAL INTEREST

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[tex]\large\sf\underline{Problem:} [/tex]

  • find the rate compounded if annually 45,000 is the present value of 75,000 due in 5 years?

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[tex]\large\sf\underline{Answer:}[/tex]

[tex] \qquad \qquad \qquad \huge \rm12\%[/tex]

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[tex]\large\sf\underline{Solution:}[/tex]

Determine the interest rate using the equation

[tex]\bold{Formula\:||\:Rate = \frac{Original\:Value}{Present\:Value\:\:\cdot\:\:Time}}[/tex]

Substitute the given values and solve for the unknown number.

  • [tex]\rm Rate = \frac{45, 000}{75, 000\:\cdot\:5}[/tex]

  • [tex]\rm Rate = \frac{45, 000}{375,000}[/tex]

Multiply the number by 100

  • [tex]\rm Rate = 0.12 \: \cdot\: 100[/tex]

  • [tex]\rm Rate = 12\%[/tex]

Therefore, 12% is the rate compounded

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