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How much would you need to deposit in an account now in order to have $4000 in the account in 10 years? Assume the account earns 8% interest compounded quarterly. Round your answer to the nearest cent.

User Hsnkhrmn
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2 Answers

7 votes

Answer:

Step-by-step explanation: I hope, here is help

How much would you need to deposit in an account now in order to have $4000 in the-example-1
User Antony Raphel
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6 votes

Answer:

$1811.56

Explanation:

The future value of P at interest rate r compounded n times per year for t years is ...

FV = P(1 +r/n)^(nt)

4000 = P(1 +.08/4)^(4·10)

P = 4000·1.02^-40 ≈ 1811.56

$1811.56 must be deposited now in order to have $4000 in 10 years.

User Igor Fridman
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