Question

Determine the principal P that must be invested at rate r = 7%, compounded monthly, so that $500,000 will be available for retirement in  t = 19 years.

 (Round your answer to the nearest cent.) P = $  

Answer 1

19 years = 228 months
if i si the rate per month (1+i)^12 = 1,07 => 1 + i = 12√1,07 = 1,00565
500 000 = (1,00565)^(228).x => x = 500 000/3,616 = $138 254,16