Question

Adair needs $21,150 to purchase a boat. How much money will you need to invest today in a savings account earning 3.2% interest, compounded monthly, to have enough money to purchase the boat in seven years?

A- $14,418.54
B- $1500.43
C- $20,681.57
D- $16,910.56

Answer 1

A=x(1+r/n)^nt
21150=x(1+0.032/12)^84
21150=x(1+0.0026666)^84
21150=x(1.002666666)^84
21150=x(1.25069809)
21150/1.25069809=x
16910.56=x

Hope this helps!