Question

How much do I need to invest now, at 5% p.a compound interest, for the total in 6 years to be $10,000

Answer 1

$7462 to the nearest dollar.

Explanation:

10000 = P(1 + 0.05)^6 where P is the initial investment.

10000 = P * 1.05^6

Taking logs:

log 10000 = log P + 6 log 1.05

log P = log 10000 - 6 log 1.05

log P = 4 - 0.127136 = 3.872864

P = 7462