Question

How much should be deposited in an account paying 6% interest compounded monthly in order to have a balance of $14,000 after 5 years?

Answer 1

Answer: He should deposit Rs. 10379.21 to get balance of $14,000.

Explanation:

Since we have given that

Rate of interest = 6% compounded monthly

Amount = $14,000

Time = 5 years

Number of months in 5 years = 5 × 12 =60 months

Let P be the sum, so it becomes,

`A=P(1+(r)/(1200))^nt\\\\14000=P(1+(6)/(1200))^(60)\\\\14000=P(1+0.005)^(60)\\\\(14000)/(1.005^(60))=P\\\\P=10379.21`

Hence, he should deposit Rs. 10379.21 to get balance of $14,000.