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Interest compund doubt

Forums › ACCA Forums › ACCA MA Management Accounting Forums › Interest compund doubt

  • This topic has 3 replies, 3 voices, and was last updated 2 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • August 25, 2020 at 10:46 am #581886
    Litllefinger04
    Member
    • Topics: 5
    • Replies: 1
    • ☆

    Q. A sum of money was invested for 10 years at 7% p.a and is now worth $2000. What was the original value invested ?

    I tried solving this by diving 2000 by (1.007)^10 which was 2000/0.508. However the answer is not correct. Please help ?

    August 25, 2020 at 1:13 pm #581914
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51582
    • ☆☆☆☆☆

    7% is 0.07 and not 0.007 !!!

    So. you should have divided by 1.07^10 (or simply looked up the 10 years discount factor at 7% in the tables provided).

    Have you watched my free lectures on this? The lectures are a complete free course for Paper MA and cover everything needed to be able to pass the exam well.

    November 23, 2020 at 2:47 am #596092
    applessauce
    Member
    • Topics: 85
    • Replies: 65
    • ☆☆

    Sir I tried solving their question

    I went to the present annuity factor table and multiplied 2000 by 0.508 to get the figure

    And my answer was $1016

    is this answer correct?

    November 23, 2020 at 10:33 am #596127
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51582
    • ☆☆☆☆☆

    Yes, it is correct 🙂

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    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • The topic ‘Interest compund doubt’ is closed to new replies.

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