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How much money would you need to deposit today at 5% annual interest compounded monthly to have $20000 in the account after 9 years?
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How much money would you need to deposit today at 5% annual interest compounded monthly to have $20000 in the account after 9 years?

User Fei Qu
by
8.5k points

2 Answers

2 votes
$12,764.49 because 9 yrs = 108 months
5% annual = (5/12)% per month = 5/1200
FV = PV*(1 + 5/1200)^108 = 20000
PV = 20000/(1 + 5/1200)^108
PV = $12,764.49
User Wrikken
by
8.4k points
2 votes
20000=p(1+0.05/12)^12*9
Solve for p
P=20,000÷(1+0.05÷12)^(12×9)
P=12,764.49
User Martin Brandhaug
by
8.2k points
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