Question

How much would you have to deposit in an account with a 5% interest rate, compounded annually, to have $1300 in your account 13 years later?

P=$[ ? ] Round to the nearest cent

Answer 1

To have $1300 in your bank account 13 years later with a 5% interest rate compounded annually, you would need to deposit approximately $676.65.

Step-by-step explanation:

To calculate how much money you need to deposit in an account with a 5% interest rate compounded annually to have $1300 in your account 13 years later, you can use the formula for compound interest:

P = A / (1 + r)^t

Where:

• P is the principal amount (the amount you need to deposit)
• A is the future value (the amount you want to have)
• r is the interest rate per period in decimal form
• t is the number of periods

Using this formula, we can plug in the values:

• P = 1300 / (1 + 0.05)^13

Calculating this, we get:

• P ≈ $676.65

So, you would need to deposit approximately $676.65.