Answer:
They need to set aside $609.98
Step-by-step explanation:
The compound interest formula is:
Where:
• A is the amount after t periods
,
• P is the initial amount
,
• r is the rate of compound interest of each period
,
• t is the amount of periods.
In the problem, we want to know P such that:
• A = $10,000
,
• r = 0.06 (6% to decimal, we divide by 100: 6/100 = 0.06)
,
• t = 4
Then: