SOLUTION: How much money should be invested today in order to make $100,000 in 25 years if the rate is 7.6% compounded quarterly? I need to learn how to set this problem up, please help m

Algebra ->  Customizable Word Problem Solvers  -> Finance -> SOLUTION: How much money should be invested today in order to make $100,000 in 25 years if the rate is 7.6% compounded quarterly? I need to learn how to set this problem up, please help m      Log On

Ad: Over 600 Algebra Word Problems at edhelper.com


    

Question 526002: How much money should be invested today in order to make $100,000 in 25 years if the rate is 7.6% compounded quarterly?
I need to learn how to set this problem up, please help me!
Thanks so much
Answer by scott8148(6628) About Me  (Show Source):
You can put this solution on YOUR website!
you will need to use logarithms to solve this

the interest rate per compounding period is 1/4 of 7.6% or 1.9%

25 yr with 4 compoundings per year is 100 compoundings

P is the principal (beginning amount)

100,000 = P (1 + .019)^100

log(100,000) = log(P) + [100 log(1.019)]


you should get a bit over 15,200