o have $25,000 to spend on a new car in five years, how much money should Jill invest today at 8% compounded monthly?

Respuesta :

[tex]~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+\frac{r}{n}\right)^{nt} \quad \begin{cases} A=\textit{accumulated amount}\dotfill &\$25000\\ P=\textit{original amount deposited}\\ r=rate\to 8\%\to \frac{8}{100}\dotfill &0.08\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{monthly, thus twelve} \end{array}\dotfill &12\\ t=years\dotfill &5 \end{cases}[/tex]

[tex]25000=P\left(1+\frac{0.08}{12}\right)^{12\cdot 5}\implies 25000=P\left( \frac{151}{150} \right)^{60} \\\\\\ \cfrac{25000}{\left( \frac{151}{150} \right)^{60}}=P\implies 16780.26 \approx P[/tex]

ACCESS MORE
EDU ACCESS