Question

use the formula for future value, A= P(1 +rt), and elementary algebra to find the missing quantity. A = $1,690; r = 6% t= 5 yearsP= $_____

Answer 1

Solution:

The algebraic expression given for future value is;

$A=P(1+rt)$

Given:

$\begin{gathered} A=\text{ \ 1690} \\ r=6\text{ \%} \\ t=5\text{years} \\ P=\text{?} \end{gathered}$

Substituting these values into the formula given,

$\begin{gathered} A=P(1+rt) \\ 1690=P(1+(\frac{6}{100}\times5)) \\ 1690=P(1+0.3) \\ 1690=P(1.3) \\ 1690=1.3P \\ \text{Dividing both sides by 1.3 to find P;} \\ P=\frac{1690}{1.3} \\ P=\text{ \ 1,300} \end{gathered}$

Therefore, P = $1,300