Question 1199245: how much money should be deposited today in an account that earns 3.5% compounded monthly so that it will accumulate to $10,000 in 3 years
Answer by htmentor(1343)   (Show Source):
You can put this solution on YOUR website! The formula for compound interest is:
A = P(1+r/n)^(nt)
where P = the initial principal, r is the rate, n is the number of times the interest
is compounded per year, and t is the time
In this case, A = 10000, r = 0.035, n = 12 and t = 3
So, we need to solve for P:
P = 10000/(1+0.035/12)^(12*3) = $9004.62
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