SOLUTION: I need this answered for my exam plz hurry if you can Jennifer wants to take a trip to Europe when she graduates from high school in 3 years. After doing some research, Jennifer

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Question 1169541: I need this answered for my exam plz hurry if you can
Jennifer wants to take a trip to Europe when she graduates from high school in 3 years. After doing some research, Jennifer has found that she can place her money in an investment with an interest rate of 4.8%/a, compounded quarterly. How much money must Jennifer put into investment now if she required $4000 to take her trip?

Found 2 solutions by Theo, ankor@dixie-net.com:
Answer by Theo(13342) (Show Source):
You can put this solution on YOUR website!
the formula for future value of a present value is f = p * (1 + r) ^ n

f is the future value
p is the present value
r is the interest rate per time period
n is the number of time periods

the future value is 4000
the interest rate per year is .048.
the interest rate per quarter is .048 / 4 = .012
the number of years is 3.
the number of quarters is 3 * 4 = 12

plug these into the formula and you get:

4000 = p * (1 + .012) ^ 12

solve for p to get:

p = 4000 / ((1 + .012) ^ 12) = 3466.521046 = $3,466.52

Answer by ankor@dixie-net.com(22740) (Show Source):
You can put this solution on YOUR website!
Jennifer wants to take a trip to Europe when she graduates from high school in 3 years.
After doing some research, Jennifer has found that she can place her money in an investment with an interest rate of 4.8%/a, compounded quarterly.
How much money must Jennifer put into investment now if she required $4000 to take her trip?
:
The compound interest formula: where
A = Amt after t yrs
Ao = initial amt
r = interest rate in decimal form
n = compounding period per year
t = no. of years
:

use you calc to find 1.012 to the 12th
Ao * 1.1539 = 4000
Ao =
Ao = $3,466.50 has to be in invested to have 4k in 3 years