Answer:
There're 2 answers:
1) If he want to receive both interest and principal of $5,400, the amount to be deposited today is $36,234. In this case, he doesn't receive any principal back.
2) If he want to receive interest of $5,400 only , the amount to be deposited today is $67,500. In this case, he can receive back $67,500 at end of deposit.
Explanation:
1) In excel there function to calculate this = PV(rate, number of payment, amount in each payment) = PV(8%,10,5400)
2) If $5,400 is interest Jason can receive at end of each year = Deposit amount x 8%; thus deposit amount is 67,500 = 5,400/8%
Answer: The answer is $ 11, 658.06
Explanation:
Using the compound interest formula
A = P ( 1+r/100)∧n
A= 5,400 (1+8/100)∧10
A= 5,400 ( 1.08)∧10
A= 5,400 ( 2.1589)
A= 5,400*2.1589
A = 11, 658.06
Therefore, he would deposit $ 11,658.06
