SOLUTION: How much must a 15 year old boy deposit in a bank now that pays 10 1/2% compounded quarterly so that after 10 years he will have 400,000?

Question 967483: How much must a 15 year old boy deposit in a bank now that pays 10 1/2% compounded quarterly so that after 10 years he will have 400,000?
Answer by lwsshak3(11628) (Show Source): You can put this solution on YOUR website!
How much must a 15 year old boy deposit in a bank now that pays 10 1/2% compounded quarterly so that after 10 years he will have 400,000?
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compound interest formula: A=P(1+r/n)^nt, P=initial investment, r=interest rate, n=number of compounding periods per year, A=amt after t-years
For given problem:
P=?
r=.105
n=4
t=10
A=400,000
..
400000=P(1+.105/4)^4*10)
400000=P(1+.02625)^40)
P=400000/(1.02625)^40
P≈141884
How much must a 15 year old boy deposit in a bank now? about $141,884
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