SOLUTION: How much money should Sheila invest in an account that earns 8% annual interest compounded monthly in order to have $4,000 in 5 years?

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Question 312093: How much money should Sheila invest in an account that earns 8% annual interest compounded monthly in order to have $4,000 in 5 years?
Answer by solver91311(24713) About Me  (Show Source):
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Is the Future Amount, , of an investment of at an annual rate of compounded times per year for years.

You want to know so that when , , and

Substitute the values and do whatever arithmetic is readily apparent:



Multiply through by



Take the log of both sides (any base, doesn't matter):



Apply the logarithm rules:





Which is to say:



Then a little calculator work:



John