Initial Investment. Read the following instructions in order to complete this di
ID: 3085663 • Letter: I
Question
Initial Investment. Read the following instructions in order to complete this discussion, and review the example of how to complete the math required for this assignment: a. Think of something you want or need for which you currently do not have the funds. It could be a vehicle, boat, horse, jewelry, property, vacation, college fund, retirement money, or something else. Pick something which cost somewhere between $2000 and $50,000. b. On page 270 of Elementary and Intermediate Algebra you will find theExplanation / Answer
An initial investment is the money a business owner needs to start up a firm. It may include the business owner's own money, money borrowed from a variety of sources including family and friends or banks, or money raised from investors. The term initial investment is also used as the money a business owner uses to invest in a capital investment project such as a piece of equipment or a building. Also Known As: Owner's Capital; Owner's Equity Examples: Sam's initial investment to start up XYZ, Inc. was $20,000 for plant and equipment and office supplies. Before you invest, it's important to make sure you know what your goals are and how to attain them. The best way to determine your goal and how to achieve it is to understand how your investment will be calculated and do the math yourself. Figuring out the calculations can be tricky though, but our step-by-step guide on calculating initial investments will make it easier. How to Calculate an Initial Investment 1 Determine your goal, what interest rate you will get and how many years you want will be investing your money. 2 Write out the formula for interest, F = P(1 + i)^n. F is the final amount. P is your initial (or principle) investment. i is the interest rate (should be written in decimal form). n is the number of years the interest is compounded. 3 Since you are actually looking for the initial amount you should invest, you will need to re-write the interest formula to P = F / (1 + i)^n 4 Input your values into the formula. For our example the final amount you want will be $250,000 in 45 years with an interest rate of 2.2%, so the formula now looks like this: P = 250,000 / (1 + 0.022)^45 5 Solve the formula. The numbers inside the parentheses are added together first, then you solve the exponential part of the formula, then you can divide. P = 250,000 / (1 + 0.022)^45 P = 250,000 / (1.022)^45 P = 250,000 / 2.6625 P = 93,897