document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=629263>Question 629263</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Suppose that Jake plans to deposit money into an account earning 5.9% compounded monthly.\r<BR>\n" );
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document.write( "a.) If he decides to deposit $4000 into the account, how much interest would he earn in four years?\r<BR>\n" );
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document.write( "b.) How much would his deposit have to be if he wanted to have a total of at least $10,000 after four years?  </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #396189 by </B><A HREF=/tutors/aboutme.mpl?userid=Theo><B>Theo(13342)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=Theo><IMG SRC=http://www.algebra.com/images/aboutme-small.gif BORDER=0 alt=\"About Me\" VALIGN=MIDDLE></A>&nbsp;<IMG SRC=http://www.algebra.com/cgi-bin/show-face.mpl?user=Theo><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=396189\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> The formulas to use are FUTURE VALUE OF A PRESENT AMOUNT AND PRESENT VALUE OF A FUTURE AMOUNT.\r<BR>\n" );
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document.write( "The reference for these formulas can be found here:<BR>\n" );
document.write( "<a  rel=nofollow HREF= \"http://www.algebra.com/algebra/homework/Finance/FINANCIAL-FORMULAS-101.lesson\" target = \"_blank\">http://www.algebra.com/algebra/homework/Finance/FINANCIAL-FORMULAS-101.lesson</a>\r<BR>\n" );
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document.write( "The formulas are shown below:\r<BR>\n" );
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document.write( "FUTURE VALUE OF A PRESENT AMOUNT<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=FV%28PA%29+=+PA+%2A+%281%2Bi%29%5En ALIGN=MIDDLE  ALT=\"FV%28PA%29+=+PA+%2A+%281%2Bi%29%5En\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "FV = Future Value<BR>\n" );
document.write( "PA = present amount<BR>\n" );
document.write( "i = Interest Rate per Time Period<BR>\n" );
document.write( "n = Number of Time Periods\r<BR>\n" );
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document.write( "You would use the following values in the future value formula:\r<BR>\n" );
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document.write( "FV = what you want to find.<BR>\n" );
document.write( "PA = 4000<BR>\n" );
document.write( "i = 5.9% / 100 = .059 / 12 = .0049167 per month (rounded to 7 decimal places)<BR>\n" );
document.write( "n = 4 * 12 = 48 months.\r<BR>\n" );
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document.write( "Your answer should be 5061.78 rounded to 2 decimal places.\r<BR>\n" );
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document.write( "The interest earned is 5061.78 - 4000 = 1061.78\r<BR>\n" );
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document.write( "PRESENT VALUE OF A FUTURE AMOUNT<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=PV%28FA%29+=+FA+%2F+%28%281%2Bi%29%5En%29+ ALIGN=MIDDLE  ALT=\"PV%28FA%29+=+FA+%2F+%28%281%2Bi%29%5En%29+\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "PV = Present Value<BR>\n" );
document.write( "FA = future amount<BR>\n" );
document.write( "i = Interest Rate per Time Period<BR>\n" );
document.write( "n = Number of Time Periods\r<BR>\n" );
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document.write( "You would use the following values in the future value formula:\r<BR>\n" );
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document.write( "PV is what you want to find.<BR>\n" );
document.write( "FA = 10000<BR>\n" );
document.write( "i = .0049167 per month (rounded to 7 decimal places)<BR>\n" );
document.write( "n = 48\r<BR>\n" );
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document.write( "Your answer should be 7902.36 rounded to 2 decimal places.\r<BR>\n" );
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document.write( "That's how much he would have to deposit to end up with $10,000 in 4 years.<BR>\n" );
document.write( "Confirm by sticking 7902.36 rather than 4000 in the future value of a present amount formula and you will find that the future value is 10,000.\r<BR>\n" );
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document.write( "It's actually 9,999.996762, but the difference is due to rounding error.  Carry the decimals further out and you'll get a lot closer and eventually right on if you carry enough decimal places.\r<BR>\n" );
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document.write( " </SPAN>\n" );
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