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13 votes
13 votes
If I want to invest my money and turn it into $900 over the course of two and a half years at the rate of 3.5%, how much money will I need to invest?

User Christian Fazzini
by
2.8k points

1 Answer

19 votes
19 votes

To turn $900 into $900 over the course of two and a half years at the rate of 3.5%, we can use the following formula:

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investment = (900 * (1 + 0.035)) ^ (2.5 / 1)

In this formula, investment represents the amount of money you need to invest, 900 represents the final amount you want to end up with, 0.035 represents the interest rate of 3.5%, 2.5 represents the number of years you want to invest for, and 1 represents the number of times per year that the interest is compounded.

Plugging in the values from the problem into the formula, we get:

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investment = (900 * (1 + 0.035)) ^ (2.5 / 1)

investment = ($900 * 1.035) ^ (2.5 / 1)

investment = $931.75 ^ 2.5

investment = $1434.24

Therefore, to turn $900 into $900 over the course of two and a half years at the rate of 3.5%, you will need to invest $1434.24.

User ArinCool
by
3.1k points
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