Question

how much money should be deposited today in an account that earns 5.5% compounded monthly so that it will accumulate to $10,000 in three years

Answer 1

$8507.50

Explanation:

compounding formula

A=P(1+r/n)^nt. P= original amount A= accumulation n=times compounded t= years

$10000=P(1+0.0055/12)^12x3

rearrange for P

$10000/(1+0.0055/12)^12x3=P

calculate in order of operations

$10000/(1.0045)^36=P

$10000/1.1755=P

final step divide

$8507.50=P

hope this works :)