SOLUTION: An investor needs $18000 in 20 years; a finance company is offering 6% compounded monthly. How much should they invest now?

Question 997954: An investor needs $18000 in 20 years; a finance company is offering 6% compounded monthly. How much should they invest now?
Found 2 solutions by lwsshak3, MathTherapy:
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
An investor needs $18000 in 20 years; a finance company is offering 6% compounded monthly. How much should they invest now?
compound Interest formula: A=P(1+r/n)^nt, P=initial investment r=interest rate, n=number of compounding periods per year, A=amt after t- years
For given problem:
P=?
r=.6%
n=12
t=20
A=8000
8000=P(1+.06/12)^12*20
8000=P(1+.005)^240=P(1.005^240=3.3102
P=8000/3.3102=2416.77
How much should they invest now?$2416.77

Answer by MathTherapy(10552) (Show Source): You can put this solution on YOUR website!

An investor needs $18000 in 20 years; a finance company is offering 6% compounded monthly. How much should they invest now?

Amount to invest now:
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