Question

How much would you need to deposit in an account now in order to have $3000 in the account in 15 years? Assume the account earns 8% interest compounded monthly.

Answer 1

To solve this problem, we will use the formula for monthly compounded interest:

`T=P(1+(r)/(12))^(12t),_{}`

where:

- T is the final amount,

- P is the initial amount,

- r is the annual interest rate,

- t is the number of years.

Substituting T=3000, t=15, and r=0.08, we get:

`3000=P(1+(0.08)/(12))^(12*15).`

Solving the above equation for P we get:

`P=(3000)/((1+(0.08)/(12))^(12*15))=907.19.`

Answer:

`907.19`

dollars.