Answer :
Answer:
The present value of 10,000 if interest is paid at a rate of 6.2% compounded weekly for 8 years is 6097.56
Explanation:
We know that compound interest is given by
[tex]A=P\left(1+\frac{r}{n}\right)^{n t}[/tex]
Where ,
Where A = final amount (which is given to be = 10000)
P = Principal amount (which is the present amount which we have to find)
r = interest rate = 6.2 = 0.062
n = no. of times interest applied per time period = it is given that the interest is applied weekly, so in one year there are 52 weeks so n = 52
t = time period = 8 years
Substituting the given values, we get
[tex]10000=\mathrm{P}\left(1+\frac{6.2}{52}\right)^{52\times 8}[/tex]
P = 6097.5
We get, P = 6097.56 which is the present value of a sum of money