P dollars is invested at annual interest rate r for 2 years. If the interest is compounded annually then the polynomial P(1 + r) 2 represents the value of the investment after 2 years. First we are...

Sometimes life get so hectic that I wish I could run away and no one can find me. So I came up with a plan to save money and take the trip of my dream. My dream trip is Hawaii. This will be a very special trip for me as I interact with the culture of others. After completing my research, I will need to set aside $7000 to enjoy myself. If I was to invest in a timeshare. The item which is desired is a vacation time share. The cost in 12 year will be about 7.000. The average interest rate of the investment is 5%. The formula I will be using is the present value formula which P= (A (1+r)-n. The present value of P will amount to A dollars in n years at an interest rate r which will be compounded annually. If you notice that the quantity raised to a power has the negative exponent of –n. When the rules of exponents is applied this means that once the negative is put into effect, the base quantity will change position by dropping down into the denominator where it will be raised to the power of n. Then it will divide A instead of multiplying A as it seems to be doing now. P= A(1 +r)-n P=7000 (1+0.05)-12 here are the relevant number that are plugged into the formula P=7000(1.05)-12 here is where I added inside parenthesis P=7000 the negative exponent creates the reciprocal of the base number ( in other words (1.05)12 change its position from up top to down below P=7000 the exponent of 12 is applied to the base number 1.79585 P=3897.87 this is the value of P using the formula. After the following result knowing that the interest rate may not stay at 5% I will begin my investment with $4000 down to begin saving for my dream trip.