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Sagot :
Answer
$1,016,699
Explanation
The amount, A that an invested sum of P, becomes over time t, at a rate of r% is given as
A = P (1 + r)ᵗ
For this question,
A = Total amount that the amount invested becomes = $80,000 × 25 = $2,000,000
P = Amount invested at the start of the 10 years before retirement = ?
r = 7% = 0.07
t = 10 years
A = P (1 + r)ᵗ
2,000,000 = P (1 + 0.07)¹⁰
2,000,000 = P (1.07)¹⁰
Note that 1.07¹⁰ = 1.967
2,000,000 = 1.967P
We can rewrite this as
1.967P = 2,000,000
Divide both sides by 1.967
(1.967P/1.967) = (2,000,000/1.967)
P = $1,016,699
Hope this Helps!!!
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