Question

Determine the principal P that must be invested at rate r=9% compounded monthly so that $500,000 will be available for retirement in t=6 years.

Answer 1

See answer below

Explanation:

Hi there,

Please recall the Compound Interest formula. Familiarize yourself with it, and how compounding works. Although hidden in the prompt, we are given the compounding constant, n, which is 12 in "compounded monthly" hence 12 times for the whole year.

Study well and persevere.

thanks,