Question

Julien's parents want $64,000 at the end of 3 years. They put their money in an account that yields 10% per year compounded monthly. Julien's parents should deposit $______. Round your answer to the nearest dollar.

Answer 1

Answer:
`\$47,471`

Explanation:

Given

Julien's parents want $64,000 at the end of 3 years

The rate of interest is 10% annually

Suppose they invested P amount initially

So, compound interest, compounded monthly is

`\Rightarrow A=P\left( 1+(r)/(n)\right)^(nt)\quad [\text{n=Numner of compounding periods}]\\\\\text{Insert the values}\\\Rightarrow 64,000=P\left( 1+(0.10)/(12)\right)^(12* 3)\\\\\Rightarrow 64,000=P\left( 1+(10)/(12)\right)^(36)\\\\\Rightarrow P=(64000)/(1.3481)\\\\\Rightarrow P=\$\ 47,471.37\approx \$ 47,471`