SOLUTION: I need $1000 dollars for my holidays in 12 months time. I have an instrument yielding 10% interest compounded monthly. How much do I need to invest? A $670 B $1100 C $900 D

Question 124290: I need $1000 dollars for my holidays in 12 months time. I have an instrument yielding 10% interest compounded monthly. How much do I need to invest?
A $670
B $1100
C $900
D $905
E $500
F $890
I'm not sure where to start,any help would be very much appriciated. I would like to see the steps and the correct answer so I'm able to answer these types of word problems in the future. Thank you so much for your time.
Answer by josmiceli(19441) (Show Source): You can put this solution on YOUR website!
The equation for compound interest is

is the amount invested
is the compound rate of interest
is the times per year compounded
is the time in years
I need $1000, so

Yhe answer is (d). You need to invest $905
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