SOLUTION: A company will need $60,000.00 in 5 years for a new addition. To meet this goal, the company deposits money in an account today that pays 3% annual interest compounded quarterly. F

Algebra ->  Percentage-and-ratio-word-problems -> SOLUTION: A company will need $60,000.00 in 5 years for a new addition. To meet this goal, the company deposits money in an account today that pays 3% annual interest compounded quarterly. F      Log On


   

Question 463691: A company will need $60,000.00 in 5 years for a new addition. To meet this goal, the company deposits money in an account today that pays 3% annual interest compounded quarterly. Find the amount that should be invested to total $60,000.00 in 5 years
Answer by robertb(5830) About Me  (Show Source):
You can put this solution on YOUR website!
From the formula for future value,
F+=+P%281%2Br%2Fn%29%5E%28nt%29, and substituting the respective values,
60000+=+P%281%2B0.03%2F4%29%5E%284%2A5%29, or 60000+=+P%2A1.0075%5E20,
or P+=+60000%2A1.0075%5E%28-20%29, we get
P = 51,671.39.