Final answer:
Fwam would need to invest approximately $48,725 for the value of the account to reach $91,000 in 12 years.
Step-by-step explanation:
To calculate the amount Fwam needs to invest, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
- A represents the future value of the account ($91,000)
- P represents the principal amount Fwam needs to invest
- r represents the interest rate per period (5.9% or 0.059 as a decimal)
- n represents the number of compounding periods per year (365 since it's compounded daily)
- t represents the number of years (12)
Plugging in the values:
$91,000 = P(1 + 0.059/365)^(365*12)
Solving for P:
P = $91,000 / (1 + 0.059/365)^(365*12)
Calculating this value, Fwam would need to invest approximately $48,725 to the nearest hundred dollars for the value of the account to reach $91,000 in 12 years.