SOLUTION: What principle will amount to 9,000 if invested at 4% compounded monthly for 6 years?

Question 1102444: What principle will amount to 9,000 if invested at 4% compounded monthly for 6 years?
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
f = p * (1+r) ^ n

f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.

you are given that:

f = 9000
r = 4% per year compounded quarterly.
n = 6 years.

your time periods will be in quarters and you need to use the rate as a decimal rather than as a percent.

your rate as a decimal = 4% / 100 = .04 per year.
divide that by 12 to get a monthly rate of .04/12
your number of quarters will be 6 * 12 = 72

you will get:

p = what you want to find
f = 9000
r = .04/12
n = 72

your formula of f = p * (1+r) ^ n becomes:

9000 = p * (1 + .04/12) ^ 72

solve for p to get p = 9000 / ((1 + .04/12) ^ 72)

this results in p = 7082.476897

that's your principal.

RELATED QUESTIONS
What principle will amount to $1500 if invested at 5% compounded semi-annually for... (answered by Boreal)

What payment made at the end of each year for 18 years will amount to $16,000 at 4.2%... (answered by Theo,ikleyn)

what principle invested at 6%, compounded continuously for 3 years, will yeild $1500?... (answered by stanbon)

To what amount will $5,200 invested for 9 years at 9% compounded annually... (answered by lwsshak3)

To what amount will $5,000 invested for 8 years at 9% compounded annually... (answered by Alan3354)

Suppose a principle amount of $1,305 were invested at an annual rate of 4.3% compounded... (answered by ikleyn)

If $7,000 is invested at 4% compounded quarterly, what is the amount after 8 years?... (answered by ikleyn)

To what amount will $8100 invested for 6 years at 8 percent compounded annually... (answered by ikleyn)

Find the amount that $8000 invested at 12% for 6 years will grow to if the interest is... (answered by Theo)