133k views
16 votes
How much would you need to deposit in an account now in order to have $2000 in the account in 10 years? Assume the account earns 2% interest compounded monthly ​

User Cyberconte
by
8.0k points

1 Answer

10 votes

Explanation:

A(t) = amount in t years

P = Principal (original investment)

r = annual interest rate (in decimal form)

n = number of times that interest is compounded each year

A(t) = P(1 + r/n)nt

Substitute in the given values: 2000 = P(1 + 0.04/12)12(10)

2000 = P(1.490832682)

P = $1341.53

User Josh Foskett
by
9.3k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories