I just need an explanation with the answers on numbers 12-13. Thanks Use the pre

Question

I just need an explanation with the answers on numbers 12-13. Thanks

Use the present value formula to determine the amount to be invested now, or the present value needed. 12) The desired accumulated amount is $6400 after 4 years invested in an account with 9% interest 12) compounded annually. A) $9034.12 B) S4941.97 C) $4533.92 D) $1866.08 Solve the problem. 13) Sumi Kato's savings account has a balance of $3451. After 23 years what will the amount of 13) interest be at 4.5% compounded annually? A) $6035.73 B) $6052.73 C) $7937.30 D) S6046.73

Explanation / Answer

We use the formula:
A=P(1+r/100)^n
where
A=future value
P=present value
r=rate of interest
n=time period.

12.

6400=P(1.09)^4

P=6400/1.09^4

=$4533.92(Approx)

13.

A=$3451(1.045)^23

=3451*2.752166348

=$9497.73(Approx)

Hence interest=A-P

=$9497.73-$3451

=$6046.73(Approx)

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