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What would you need to invest to produce $23711 if your interest rate is 3.6% compounded monthly for 15 years? Round your answer to the nearest dollar.

User Robot
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1 Answer

3 votes

Answer:

$10576.38

Explanation:

To calculate the investment amount required to produce $23711 at an interest rate of 3.6% compounded monthly for 15 years, you can use the formula for compound interest:

A = P * (1 + r/n)^(nt)

where:

A is the amount of money you have after "t" years,

P is the initial investment amount (what you want to find),

r is the interest rate as a decimal,

n is the number of times the interest is compounded per year,

t is the number of years the investment will be compounded for.

In this case,

r = 0.036

n = 12 (because the interest is compounded monthly)

t = 15

So, we can plug in the values into the formula and solve for P:

A = P * (1 + 0.036/12)^(12 * 15)

$23711 = P * (1.003)^(180)

$23711 = P * 2.2375

Dividing both sides by 2.2375:

P = $23711 / 2.2375

P = $10576.38

So, to produce $23711 at an interest rate of 3.6% compounded monthly for 15 years, you would need to invest $10576.38. Rounded to the nearest dollar, this amount is $10576.

User Ethan McTague
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