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How much would you need to deposit in an account now in order to have $6000 in the account in 15 years?
Assume the account earns 6% interest compounded quarterly. Round your answer to the nearest cent.
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Formula for discretely compounded account is f =
where f is the future value
P is the principal value (one-time original deposit)
r is the interest rate per time period (per quarter, in this case)
n is the number of time periods (quarters, in this case)
Your time periods are quarters.
f = 6000 dollars.
P is unknown value under the question.
r = 0.06/4 in decimal form.
n = 15 years * 4 quarters = 60 quarters (time periods).
Formula becomes 6000 = .
From the formula, the required investment is P = = 2455.78 dollars. ANSWER
Solved.
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To see many other similar and different solved problems, look into the lessons
- Compounded interest percentage problems
- Problems on discretely compound accounts
in this site.
After reading these lessons, you will tackle such problems on your own without asking for help from outside.
Also, you have this free of charge online textbook in ALGEBRA-I in this site
- ALGEBRA-I - YOUR ONLINE TEXTBOOK.
The referred lessons are the part of this online textbook under the topic "Logarithms".
Save the link to this online textbook together with its description
Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson
to your archive and use it when it is needed.
Happy learning (!)