Question

ariana is going to invest in an account paying an interest rate of 1.9% compounded monthly. how much would ariana need to invest,to the nearest ten dollars,for the value of the account to reach $110,000 in 14 years?

Answer 1

9514 1404 393

Answer:

$84,330

Explanation:

The compound interest formula gives the value of an investment.

A = P(1 +r/n)^(nt)

where principal P is invested at annual rate r compounded n times per year for t years. Using your given values, we can solve for P.

110,000 = P(1 +0.019/12)^(12·14)

P = 110,000/(1 +0.019/12)^(12·14) ≈ 110,000/1.00158333...^168

P ≈ 110,000/1.30446

P ≈ 84326.04 ≈ 84,330 . . . . dollars