Question

You wish to make a single deposit into an account so that your deposit money will grow to be worth $50,000 and ten years the count has an APR of 3. 9% compounded monthly how much should you deposit

Answer 1

Given:

The amount A= $50000

Interest =3. 9 %

Time = 10 years.

Consider the formula to find the amount for compound interest monthly.

`A=P(1+(r)/(12))^(12t)`

Substitute A=50000, r=3.9/100=0.039 and t=10, we get

`50000=P(1+(0.039)/(12))^(12*10)`

`50000=P(1.00325)^(120)`

`50000=P*1.47604707572`
`P=(50000)/(1.47604707572)=33874.2583638`

The deposit money should be $33874.26.