Question

Jimmy is investing money, he wants to

have $10,000 in 48 years, the investment gets 18%. How much does he need to start with?

Answer 1

This is a compound interest problem. We can use the formula:

A=P(1+r/n)nt

where:

A is the future value of the investment

P is the present value of the investment

r is the annual interest rate

n is the number of times the interest is compounded per year

t is the number of years

We are given:

A = 10,000

r = 0.18

n = 1 (assuming annual compounding)

t = 48

We need to find P. Plugging in the values, we get:

10,000=P(1+0.18/1)1×48

Solving for P, we get:

P=(1+0.18)4810,000​

Using a calculator, we get:

P≈2.17

So Jimmy needs to start with about $2.17 to have $10,000 in 48 years at 18% interest.

Explanation: