SOLUTION: Jesse has inherited $100000.00 He wants to save $80000 for a trip around the world in 4 years. How much should Jesse put in a saviongs bond that earns 9.4% /a compounded monthly t
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Question 757541: Jesse has inherited $100000.00 He wants to save $80000 for a trip around the world in 4 years. How much should Jesse put in a saviongs bond that earns 9.4% /a compounded monthly to ensure he has $80000 four years from now? how much of the inherited money is not invested? Answer by nerdybill(7384) (Show Source):
You can put this solution on YOUR website! Jesse has inherited $100000.00 He wants to save $80000 for a trip around the world in 4 years. How much should Jesse put in a saviongs bond that earns 9.4% /a compounded monthly to ensure he has $80000 four years from now? how much of the inherited money is not invested?
.
Compound interest formula:
A = P(1 + r/n)^(nt)
where
A is amount after time t (80000)
P is the initial amount (what we're looking for)
r is rate (.094)
n is times compounded (12)
t is years (4)
.
80000 = P(1 + .094/12)^(12*4)
80000 = P(1 + 0.007833333)^(48)
80000 = P(1.007833333)^(48)
80000 = P(1.4543149703845279456300933619882)
80000/1.4543149703845279456300933619882 = P
$55008.72 = P
.
Amount not invested:
100000-55008.72 = $44991.28
