Question

How much would you need to deposit in an account now in order to have $20,000 in the account in 6 years? Assume the account earns 4% interest. Round your answer to the nearest penny

Answer 1

P = $17,750.074

Explanation:

amount (A) = $20,000

rate of interest= 4%

time (t) = 6 year

principle (P) = ?

`A=P (1+(r)/(100))^(t)`

`20000=P (1+(4)/(100))^(6)`

`P=20000* ((25)/(26))^6`

on solving we get

P = $17,750.074

hence we have to deposit $17,750.074 to get $20,000 in the account after 6 years.