document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=1198831>Question 1198831</A>: <I><SPAN STYLE=\"word-break: break-all;\"> If a bank pays 15% compounded semi-annually, how much should be deposited now to have $1800 in 5 years from now?<BR>\n" );
document.write( "Amount the needs to be deposited now = $ </SPAN>\n" );
document.write( "</I><HR><TABLE width=100%><TR><TD><B><A HREF=http://www.algebra.com/>Algebra.Com's</A> Answer #837690 by </B><A HREF=/tutors/aboutme.mpl?userid=mananth><B>mananth(16946)</B></A><img src=\"/images/stars/stars-13.gif\" alt=\"\" >&nbsp;<A HREF=/tutors/aboutme.mpl?userid=mananth><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=mananth><BR>You can <A HREF=\"/cgi-bin/embed-solution.mpl?show=1&solution=837690\">put this solution on YOUR website!</A><BR><SPAN STYLE=\"word-break: break-all;\">  the formula for compound interest:\r<BR>\n" );
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document.write( "A = P(1 + r/n)^(nt)\r<BR>\n" );
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document.write( "Where,<BR>\n" );
document.write( "P = principal amount <BR>\n" );
document.write( "r = annual interest rate (15%)<BR>\n" );
document.write( "n = number of times the interest is compounded per year (2)<BR>\n" );
document.write( "t = time period (5 years)<BR>\n" );
document.write( "A = amount at the end of the time period ($1800)\r<BR>\n" );
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document.write( "Substituting the values in the formula, we get:\r<BR>\n" );
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document.write( "$1800 = P(1 + 0.15/2)^(2*5)<BR>\n" );
document.write( "$1800 = P(1 + 0.075)^10<BR>\n" );
document.write( "$1800 = P(1.075)^10<BR>\n" );
document.write( "P = $975.62 (rounded to two decimal places)\r<BR>\n" );
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document.write( " </SPAN>\n" );
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