Andy invests £A at a rate if interest 4% per annum. After five years it will be worth £10,000. What is A?
My working out:
Un = AR^n-1
10,000 = A * 1.04^(5-1)
A = 10000/1.04^(5-1)
However, the book says the answer is:
A = 10000/1.04^(5)
I thought the formula was R to the the power of n-1, by the book only uses R to the power of n. Why is this?