Business Mathematics 114

Question

Pedro made an investment at the beginning of January, 2000. It has grown to be $54619.89 by the beginning of April, 2006. At a rate of interest of 5.23% per year compounded monthly, what was the initial investment?

Answer 1

Using the present value (PV) function in Excel

Number of periods = 63

Future Value = $54,619.89

Interest Rate per period = 5.23%/12

PV = $41,430.15