SOLUTION: you saved $25000 to buy a new car in time for graduation in 2020. in 2010 you invested in a certain amount of your savings in a blue chip stock that yields 5% interest compounded

Algebra ->  Exponential-and-logarithmic-functions -> SOLUTION: you saved $25000 to buy a new car in time for graduation in 2020. in 2010 you invested in a certain amount of your savings in a blue chip stock that yields 5% interest compounded       Log On


   

Question 1018050: you saved $25000 to buy a new car in time for graduation in 2020. in 2010 you invested in a certain amount of your savings in a blue chip stock that yields 5% interest compounded monthly. find out much money you started with before you saved enough to buy a new car.
Please help.
Thank you
Answer by MathTherapy(10557) About Me  (Show Source):
You can put this solution on YOUR website!

you saved $25000 to buy a new car in time for graduation in 2020. in 2010 you invested in a certain amount of your savings in a blue chip stock that yields 5% interest compounded monthly. find out much money you started with before you saved enough to buy a new car.
Please help.
Thank you
Present Value formula: matrix%281%2C3%2C+P%2C+%22=%22%2C+A%2F%281+%2B+i%2Fm%29%5Emt%29, where:

matrix%281%2C2%2C+P%2C+%22=%22%29 Present Value of initial investment (Unknown, in this case)

matrix%281%2C2%2C+A%2C+%22=%22%29 Future Value of initial investment ($25,000, in this case)

matrix%281%2C2%2C+i%2C+%22=%22%29 Annual Interest rate (5%, or .05, in this case)

matrix%281%2C2%2C+m%2C+%22=%22%29 Number of ANNUAL compounding periods (monthly, so 12, in this case)

matrix%281%2C2%2C+t%2C+%22=%22%29 Time, in years (10, in this case)

P+=+A%2F%281+%2B+i%2Fm%29%5Emt then becomes: