SOLUTION: How much should be invested at 8% compounded semiannually in order to have $5000 at the end of 8 years A. $4215.27 B. $9364.91 C. $2669.54 D. $3048.78

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Question 87176: How much should be invested at 8% compounded semiannually in order to have $5000 at the end of 8 years


A. $4215.27
B. $9364.91
C. $2669.54
D. $3048.78
Found 2 solutions by stanbon, Edwin McCravy:
Answer by stanbon(48551) About Me  (Show Source):
You can put this solution on YOUR website!
How much should be invested at 8% compounded semiannually in order to have $5000 at the end of 8 years
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Formula: A(t)=P(1+r/n)^(nt)
5000 = P(1+0.08/4)^(2*8)
5000 = P(1.872981246)
P = $2669.54
===============
Cheers,
Stan H.

Answer by Edwin McCravy(6936) About Me  (Show Source):
You can put this solution on YOUR website!
How much should be invested at 8% compounded
semiannually in order to have $5000 at the end
of 8 years
A+=+P%281%2Br%2Fn%29%5E%28nt%29
Where A = final amount = 5000
P = beginning amount = ? (that's what we are to find)
r = rate expressed as a decimal = 0.08
n = number of compoundings per year = 2
t = number of years = 8
Substituting for everything but P
5000+=+P%281%2B0.08%2F2%29%5E%282%2A8%29
5000+=+P%281%2B.04%29%5E16
5000+=+P%281.04%29%5E16
5000+=+P%281.872981246%29
5000%2F1.872981246+=+P
2669.540878
Rounding to the next higher penny:
$2669.55
Edwin