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Adrianna wants $10,000 saved in 3 years to make a down payment on a house. How much money should she invest now at 4.6% compounded semiannually in order to meet her goal? $

User Stanete
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Final answer:

Adrianna should invest around $8724.61 now at a 4.6% interest rate compounded semiannually to meet her goal of saving $10,000 in 3 years.

Step-by-step explanation:

To calculate the amount of money Adrianna should invest now, we can use the formula for compound interest:

A = P(1 + r/n)^(nt), { where A is the future value, P is the principal amount (the amount to be invested), r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

In this case, Adrianna wants to have $10,000 in 3 years, so A = $10,000, r = 4.6% (or 0.046), and n = 2 (as interest is compounded semiannually).

We need to solve for P.

Plugging in the values into the formula, we get:

$10,000 = P(1 + 0.046/2)^(2*3)

Simplifying the equation gives:

$10,000 = P(1.023)^6

Solving for P, we divide both sides of the equation by (1.023)^6:

P = $10,000 / (1.023)^6

We find that P is approximately $8724.61

Therefore, Adrianna should invest around $8724.61 to meet her goal of having $10,000 in 3 years.

User Elle
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