document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1093808>Question 1093808</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Please help with this problem:How much money would you need to deposit today at 5% annual interest compounded monthly to have $20000 in the account after 9 years?  \r<BR>\n" );
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document.write( "Thanks! </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #708421 by </B><A HREF=/tutors/aboutme.mpl?userid=greenestamps><B>greenestamps(13203)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=greenestamps><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=greenestamps><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=708421\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> <br>Ooh! A present value formula for working a problem involving compound interest.  Certainly valid; but not easy to understand, so not the way I would go.<br><BR>\n" );
document.write( "You are starting with some unknown amount x.<BR>\n" );
document.write( "The money is accruing interest monthly for 9 years; that is 9*12 =108 months.<BR>\n" );
document.write( "The annual interest rate is 5%, or .05; the periodic (monthly) interest rate is one-twelfth of that, let's just call it (.05/12).<BR>\n" );
document.write( "The \"growth factor\" -- what the value of the account gets multiplied by each time interest is gained, is 1 plus the periodic interest rate; in this case (1+.05/12).<BR>\n" );
document.write( "The growth factor is applied to the beginning amount 108 times (monthly for 9 years).<br><BR>\n" );
document.write( "So, since we want the value after the 9 years to be $20,000,<BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=20000+=+x%281%2B.05%2F12%29%5E108 ALIGN=MIDDLE  ALT=\"20000+=+x%281%2B.05%2F12%29%5E108\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
document.write( "<IMG STYLE=\"max-width:80%;\" SRC=/cgi-bin/plot-formula.mpl?expression=x+=+20000%2F%28%281%2B.05%2F12%29%5E108%29+=+12764.49 ALIGN=MIDDLE  ALT=\"x+=+20000%2F%28%281%2B.05%2F12%29%5E108%29+=+12764.49\"   DISABLED_style= \"max-width:90%; height:auto;\" ><BR>\n" );
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