Question

How much must be deposited today into the following account in order to have $ 50,000 in 6 years for a down payment on a​ house? Assume no additional deposits are made. An account with monthly compounding and an APR of 5​%

Answer 1

The Amount initially deposited is $37046.64

Explanation:

A = p (1+r/n)^(nt)

A= final amount= $5000

P = principal amount=

r = rate = 0.05

n = number of times compounded

= 6*12

= 48

t = years= 6

A = p (1+r/n)^(nt)

50000 = p (1+0.05/48)^(48*6)

50000= p(1.001041667)^288

50000= p (1.34965)

50000/1.34965= p

37046.64 = p

The Amount initially deposited is $37046.64