Question

How much money would you need to deposit today at 5% annual interest compounded monthly to have $20000 in the account after 9 years?

Answer 1

20000=p(1+0.05/12)^12*9
Solve for p
P=20,000÷(1+0.05÷12)^(12×9)
P=12,764.49

Answer 2

$12,764.49 because 9 yrs = 108 months
5% annual = (5/12)% per month = 5/1200
FV = PV*(1 + 5/1200)^108 = 20000
PV = 20000/(1 + 5/1200)^108
PV = $12,764.49