SOLUTION: Determine the principal P that must be invested at rate r = 9%, compounded monthly, so that $500,000 will be available for retirement in t = 6 years. (Round your answer to the near

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Question 1155439: Determine the principal P that must be invested at rate r = 9%, compounded monthly, so that $500,000 will be available for retirement in t = 6 years. (Round your answer to the nearest cent.)
P = ?
Answer by greenestamps(13200) About Me  (Show Source):
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The future value A is

A+=+P%281%2Br%29%5En

where r is the periodic interest rate and n is the number of periods.

The annual interest rate is 9% or .09; the periodic (monthly) interest rate is .09/12 = .0075.

The 6 years of monthly periods means 6*12=72 periods.

You want $500,000 at the end of 6 years:

500000+=+P%281%2B.0075%29%5E72
P+=+500000%2F%281%2B.0075%29%5E72

Use a calculator....