SOLUTION: Katy wants to buy a bicycle that costs $75 and will purchase it in 6 months. how much should she put in her savings account for this if she can get 3% per annum compounded monthly?

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Question 934002: Katy wants to buy a bicycle that costs $75 and will purchase it in 6 months. how much should she put in her savings account for this if she can get 3% per annum compounded monthly?
Answer by ptfile(81) About Me  (Show Source):
You can put this solution on YOUR website!
Let  t = duration of payment
     n = number of intervals
     r = rate
    PV = Present Value
    FV = Future Value
PV+=+FV%2F%281%2Br%2Fn%29%5E%28t%29
PV+=+75%2F%281%2B.03%2F12%29%5E%286%29
PV+=+75%2F%281.0025%29%5E6
PV+=+75%2F1.015094063
PV+=+73.88

Katy needs to place $73.88 in her savings account in order for her to buy the bicycle in 6 months.