Question

How much would you need to deposit in an account now in order to have $3000 in the account in 15 years? Assume theaccount earns 5% interest compounded quarterly.

Answer 1

Okay, here we have this:

According with the provided information, we are going to replace in the following formula:

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

Replacing we obtain:

`\begin{gathered} 3000=P(1+(0.05)/(4))^(4\cdot15) \\ \end{gathered}`

Now, let's solve for P, that is the principal investment:

`\begin{gathered} P\mleft(1+(0.05)/(4)\mright)^(4\cdot\: 15)=3000 \\ P(4.05^(60))/(4^(60))=3000 \\ P=3000\cdot(4^(60))/(4.05^(60)) \\ P\approx1,423.70 \end{gathered}`

Finally we obtain that the deposit wold be aproximately of $1,423.70.