Wesley invests $2,000 in an investment plan. After 6 years, he gains a total amount of $3,200 from that investment. What is the time value of money that he invested?
Answers
Answered by
0
600$ per year
hope you get
hope you get
Answered by
0
We know that time value of money represents 'Present Value' PV.
PV = FV / (1+r)^n
Where, FV is future value of money
r = rate of interest
n = no. of years of deposit
Here, FV = $3200
n = 6
Investment amount ( Principal) = $2000
Interest earned (SI) = 3200 - 2000 = $1200
SI = Pnr/100
1200 = 2000 * 6 * r / 100
Therefore, r = 10% = 0.1
PV = 3200 / ( 1+0.1) ^ 6
PV = 3200 / 1.771561
Answer:
Time value of money is $1806
Similar questions