Question

Donna has decided to invest to help with her retirement savings. How much would she have to invest to have $142,300 after 17 years, assuming an interest rate of 3.45% compounded quarterly?

Answer 1

Donna would have to invest $68,745.12 to have $142,300 after 17 years with an interest rate of 3.45% compounded quarterly.

Step-by-step explanation:

To calculate the amount Donna would have to invest, we can use the formula for compound interest:

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

Where:

• A is the final amount (in this case, $142,300)
• P is the principal amount (what Donna needs to invest)
• r is the annual interest rate (3.45%, or 0.0345)
• n is the number of times interest is compounded per year (quarterly, so 4)
• t is the number of years (17)

Plugging in the values, we get:

142,300 = P(1 + 0.0345/4)^(4 * 17)

Simplifying, we find that Donna would have to invest approximately $68,745.12 to have $142,300 after 17 years with an interest rate of 3.45% compounded quarterly.