SOLUTION: How much would you need to deposit in a account now in order to have $2000 in the account in 10 years? Assume the account earns 8% tnterest compounded monthly.

Question 1102445: How much would you need to deposit in a account now in order to have $2000 in the account in 10 years? Assume the account earns 8% tnterest compounded monthly.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
This is the compound interest formula
P=Po(1+rate/12)^120, the rate divided by 12 months in a year, and 120 compoundings.
2000=Po(1+(0.08/12))^120=Po*2.2196, but don't round. Divide both sides by the 2.2196 and Po=$901.05
Rule of 72 would suggest doubling in 72/8 or 9 years, and this has doubled and a little more, which is consistent.
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