SOLUTION: how much money do i need to put in a saving account at 5 % semi annual for 25 years to make 1000000

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Question 606810: how much money do i need to put in a saving account at 5 % semi annual for 25 years to make 1000000
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,

money is invested at 5% apr with interest compounded semiannually for 25 years

What Principal would yield 1,000,000

Note:  In General: A+=+P%281%2Br%2Fm%29%5Emt

A = Accumulated Amount = $1,000,000

P= principal 

r= annual rate = .05

m= periods per year = 2

t= years = 25

 P+=+A%2F%281%2Br%2Fm%29%5Emt

P+=+1000000%2F%281%2B.05%2F2%29%5E%2850%29

P+=+1000000%2F%281.025%29%5E%2850%29

 P = $290,942.21