document.write( "Question 212107: Debbie plans on investing enough money so that she will have $2000 at the end of two years. How much money will she have to invest now if her money will grow according to the following formula: 2000 = P (1.025)^4? \n" ); document.write( "

Algebra.Com's Answer #160187 by drj(1380) $\"\"$ $\"About$

You can put this solution on YOUR website!
Debbie plans on investing enough money so that she will have $2000 at the end of two years. How much money will she have to invest now if her money will grow according to the following formula: 2000 = P (1.025)^4? \r
\n" ); document.write( "
\n" ); document.write( "\n" ); document.write( "Step 1. Solve for P where P is the initial investment. Interest in this case is 2.5 % compounded semiannually since in this case it's compounded 4 times in 2 years \r
\n" ); document.write( "\n" ); document.write( "Divide by $\"1.025%5E4=+1.025%2A1.025%2A1.025%2A1.025=1.103812891\"$ to both sides of equation to isolate P.\r
\n" ); document.write( "\n" ); document.write( " $\"2000%2F1.103812891=P%281.025%5E4%29%2F1.025%5E4=P\"$ \r
\n" ); document.write( "\n" ); document.write( "Step 2. P=$1811.90\r
\n" ); document.write( "\n" ); document.write( " \n" ); document.write( "

\n" );