document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=519899>Question 519899</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Determine the principal P that must be invested at rate r, compounded monthly, so that $500000 will be available for retirement in t years.\r<BR>\n" );
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document.write( "r=7.5%, t=20 </SPAN>\n" );
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document.write( "r=7.5%, t=20<BR>\n" );
document.write( "**<BR>\n" );
document.write( "compound interest formula: A=P(1+r)^t, P= initial investment, r=interest rate/period, <BR>\n" );
document.write( "t=number of periods, A=amount after t periods.<BR>\n" );
document.write( "..<BR>\n" );
document.write( "For given problem:<BR>\n" );
document.write( "A=500000, r=.075/12=.00625, t=12*20=240<BR>\n" );
document.write( "..<BR>\n" );
document.write( "500000=P(1+.075/12)^12*20<BR>\n" );
document.write( "P=500000/(1+.00625)^240<BR>\n" );
document.write( "=500000/(1.00625)^240<BR>\n" );
document.write( "=$112,087.09<BR>\n" );
document.write( "ans:<BR>\n" );
document.write( "The principal that must be invested=$112,087.09 </SPAN>\n" );
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