SOLUTION: please help me I never and still isn't good on doing these problems. Thanks in advance. How much you must deposit in an account that pays 6.25% interest, compounded annually to

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Question 1035882: please help me I never and still isn't good on doing these problems. Thanks in advance.
How much you must deposit in an account that pays 6.25% interest, compounded annually to have a balance of $700.00 after 2 years.

Found 2 solutions by josgarithmetic, MathTherapy:
Answer by josgarithmetic(39618)   (Show Source): You can put this solution on YOUR website!
Look at this year by year, since 1 year is the compounding period.

p, principle to start

FIRST YEAR END
balance is

SECOND YEAR END
Balance is
-
Simplify this expression.
Equate the expression to 700.00 dollars.
Solve for p.
Answer by MathTherapy(10552)   (Show Source): You can put this solution on YOUR website!

please help me I never and still isn't good on doing these problems. Thanks in advance.
How much you must deposit in an account that pays 6.25% interest, compounded annually to have a balance of $700.00 after 2 years.
Use the formula for the PRESENT VALUE of $1: . where:

P = Present Value (unknown in this case)

A = Future Value ($700, in this case)

i = Interest rate (6.25%, or .0625, in this case)

m = Compounding periods, per year (anuually, or 1, in this case)

t = Time, in years (2, in this case)



Therefore,  becomes:  ======>  =======> 

P, or Present Value/Deposit to be made now =  

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