SOLUTION: What sum must be deposited today at 18% per year compounded monthly if the goal is to a compound amount of $50, 000 six years from today? How much interest will be earned during th

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Question 1164044: What sum must be deposited today at 18% per year compounded monthly if the goal is to a compound amount of $50, 000 six years from today? How much interest will be earned during this period?
Found 3 solutions by ikleyn, htmentor, solver91311:
Answer by ikleyn(52765) About Me  (Show Source):
You can put this solution on YOUR website!
.

50000 = X%2A%281%2B0.18%2F12%29%5E%2812%2A6%29 = X%2A%281%2B0.015%29%5E72 = X%2A1.015%5E72.


X = 50000%2F1.015%5E72 = 17116.50  dollars.

For all details and explanations, look into these two lessons
    - Compound interest percentage problems
    - Problems on discretely compound accounts
in this site, and learn the subject from there.


After reading these lessons, you will tackle such problems on your own without asking for help from outside.

Also,  you have this free of charge online textbook in ALGEBRA-I in this site
    - ALGEBRA-I - YOUR ONLINE TEXTBOOK.

The referred lessons are the part of this online textbook under the topic "Logarithms".


Save the link to this online textbook together with its description

Free of charge online textbook in ALGEBRA-I
https://www.algebra.com/algebra/homework/quadratic/lessons/ALGEBRA-I-YOUR-ONLINE-TEXTBOOK.lesson

to your archive and use it when it is needed.


Happy learning (!)



Answer by htmentor(1343) About Me  (Show Source):
You can put this solution on YOUR website!
The compound interest formula is: P(t) + P0(1 + r/n)^nt, where
P0 = initial principal, r = the interest rate, n = number of times interest
compounded per year, t = the number of years
We need to solve for the initial principal, P0, given r = 0.18, n = 12, t = 6, P = 50000
P0 = 50000/(1 + 0.18/12)^(6*12) -> P0 = $17116.50

Answer by solver91311(24713) About Me  (Show Source):
You can put this solution on YOUR website!


The future value, , of an investment of at a rate of percent per annum compounded times per year for years is given by:



Solve for , then plug in the numbers and do the arithmetic:




John

My calculator said it, I believe it, that settles it