Question

 A certain amount was invested on 01/01/2013, which generates $2,000 at the beginning of every month in year 2013. The interest rate on the investment was 18%.  Calculate the original investment and the interest .

Answer 1

The interest rate on the investment was 18%. The original investment and the interest earned can be calculated as follows:

 

R = $2,00

n = 12

i = 18%/12 = 1.5%

 

Original Investment = PV of annuity due on 01/01/2013

Earned amount of interest = [($2,000*12) – $22,142.24] =$1,857.76

$1857.76