document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1123271>Question 1123271</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Rhonda needs to have $2500 in three and a half years.   What monthly investment will she have if her bank offers a 4.8% interest rate, compounded monthly? </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #739574 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=739574\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\"> f = p * (1 + r) ^ n\r<BR>\n" );
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document.write( "f is the future value<BR>\n" );
document.write( "p is the present value<BR>\n" );
document.write( "r is the interest rate per time period.<BR>\n" );
document.write( "n is the number of time periods.\r<BR>\n" );
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document.write( "in your problem:\r<BR>\n" );
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document.write( "time periods are months.\r<BR>\n" );
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document.write( "f = 2500<BR>\n" );
document.write( "p = what you want to find<BR>\n" );
document.write( "r = 4.8% / 100 / 12 = .004 per month<BR>\n" );
document.write( "n = 3.5 * 12 = 42 months\r<BR>\n" );
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document.write( "formula becomes 2500 = p * (1 + .004) ^ 42\r<BR>\n" );
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document.write( "solve for p to get:\r<BR>\n" );
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document.write( "p = 2500 / (1 + .004) ^ 42) = 2114.982815\r<BR>\n" );
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document.write( "she would have to invest 2114.982815 today in order to have 2500 in 3.5 years at 4.8% per year compounded monthly.\r<BR>\n" );
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document.write( "2114.982815 * (1 + .004) ^ 42 = 2500\r<BR>\n" );
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document.write( "the formula requires the interest rate, not the persent.<BR>\n" );
document.write( "therefore divide 4.8 / 100 to get .045.<BR>\n" );
document.write( "with compounding per month, the annual rate is didivded by 12.<BR>\n" );
document.write( "therefore .045 / 12 = .004<BR>\n" );
document.write( "the number of month is equal to the number of years * 12.<BR>\n" );
document.write( "therefore 3.5 * 12 = 42\r<BR>\n" );
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document.write( " </SPAN>\n" );
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