SOLUTION: How much money should be invested at 5% compounded quarterly for 20 years so that you have P20,000 at the end of 20 years?

Question 1190559: How much money should be invested at 5% compounded quarterly for
20 years so that you have P20,000 at the end of 20 years?

Answer by ikleyn(52793) (Show Source): You can put this solution on YOUR website!
.
How much money should be invested at 5% compounded quarterly for
20 years so that you have P20,000 at the end of 20 years?
~~~~~~~~~~~~~~~~

Use the formula for the future value of the discretely compounded account.

        FV = ,      (1)


where X is the unknown invested amount under the problem's question.


With the given value  FV = P20,000, the equation takes the form

    20000 = ,     (2)


Calculate   = 2.701485  and solve equation (2) for X

    X =  = 7403.3356.


Round it to the closest greater cent (centavo ?) to get the ANSWER  P7403.34.


CHECK.  FV =  = 20,000.01.    ! Good enough !

Solved.

-----------------

For all details and explanations, look into these two lessons
    - Compounded interest percentage problems
    - Problems on discretely compound accounts
in this site, and learn the subject from there.

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.

RELATED QUESTIONS
How much money should be invested at 5% compounded quarterly for 20 years so that you... (answered by ikleyn)

Application of Exponential Functions: How much money should be invested at 5%... (answered by ikleyn)

Frank and Alexandria have a new grandson. How much money should they invest now so that... (answered by josgarithmetic)

An inheritance of R400 000 will provide how much at the end of each year for the next 20... (answered by ikleyn,MathTherapy)

if you invest $20,000 at an APR of 3.5% for 20 years, how much money would you have in... (answered by ikleyn)

A person wishes to deposit $5,000 per year in a savings account which earns interest of 8 (answered by ikleyn)

How much money should be invested at 5% interest, compounded quarterly, so that 12 years... (answered by solve_for_x)

1. How much will you have in 10 years if you invest $20,000 at 6% compounded annually? (answered by ikleyn,Boreal)

How much money should be invested every quarter at 10% per year compounded quarterly to... (answered by rfer)