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How much would you need to deposit in an account now in order to have $5000 in the account in 15years? Assume the account earns 8% interest compounded monthly.$

1 Answer

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A(t) = amount in t years

P = Principal (original investment)

r = annual interest rate (in decimal form)

n = number of times that interest is compounded each year


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

Substitute in the given values:


5000=P(1+(0.08)/(12))^(12*15)
5000=P(1.0067)^{180^{}}
5000=P*3.307
P=1511.94

Hence the amount need to deposit is 1511.94 dollar.

User Edhar Khimich
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