Question

Suppose that you want to have a $593,447 retirement fund after 41 years. How much will you need to deposit now if you can obtain an APR of 3%, compounded daily? Assume that no additional deposits are to be made to the account.

Answer 1

To find out how much money you need to deposit now to have $593,447 after 41 years with an APR of 3%, compounded daily, you can use the formula for compound interest.

Step-by-step explanation:

To find out how much money you need to deposit now to have $593,447 after 41 years with an APR of 3%, compounded daily, you can use the formula for compound interest:

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

Where:

• A is the future value ($593,447)
• P is the principal deposit amount (unknown)
• r is the annual interest rate (3% or 0.03)
• n is the number of times the interest is compounded per year (365)
• t is the number of years (41)

Plugging these values into the formula, you get:

593,447 = P(1 + 0.03/365)^(365*41)

To solve for P, you can divide both sides of the equation by the expression in the parentheses and then solve for P:

P = 593,447 / (1 + 0.03/365)^(365*41)