Question

explain this sum this ans is 9000
give steps and explain i will mark u as brainiest answer​

Answer 1

Answer:

bro/sis the answer is 6,956

pls make me the brainiest

l will give the explaining

explanation

Let us look at the problem analytically. If we deposit a sum of money with the present

value PV in a bank that pays interest at the rate r, then after one year it will become

PV(1 + r). Let us call this amount its future value FV. We may write it as

FV = PV (1 + r)

We may also think of (1 + r) as a growth factor. Continuing this process for another year,

compounding the interest annually, the future value will become

FV = [PV (1 + r)](1 + r) = PV (1 + r)

2

This gives the future value after two years. If we can continue this compounding for n

years, the future value then becomes

FV = PV (1 + r)

n

(2.1)

The above expression is valid for annual compounding. If we do the compounding

quarterly, the amount of interest credited will be only at the rate r/4, but there will also be

4n compounding periods in n years. Similarly, for monthly compounding, the interest rate

is r/12 per month and the compounding occurs 12n times in n years. Thus, the above

equation becomes

FV = PV (1 + r/12)12n

At times, it is necessary to find the present value of a sum of money available in the

future. To do that we write equation (2.1) as follows:

PV =

FV

(1 + r)

n (2.2)

This gives the present value of a future payment. Discounting is the procedure to convert

the future value of a sum of money to its present value. Discounting is a very important

concept in finance because it allows us to compare the present value of different future

payments.

Equations (2.1) and (2.2) relate the following four quantities:

FV = the future value of a sum of money

PV = the present value of the same amount

r = the interest rate, or the growth rate per period

n = number of periods of growth

If we know any three of the quantities, we can always find the fourth one.