SOLUTION: I'm trying to figure compound interest but when you have the end result and you want to know how much to invest. I understand the formula, but I am having a hard time actually cal

Algebra ->  Finance -> SOLUTION: I'm trying to figure compound interest but when you have the end result and you want to know how much to invest. I understand the formula, but I am having a hard time actually cal      Log On


   

Question 852717: I'm trying to figure compound interest but when you have the end result and you want to know how much to invest. I understand the formula, but I am having a hard time actually calculating it. I have been looking for a step by step process, but the skip to the answer once all the variables have been filled in.
Example:
A=25,000
years = 8
N= number of times per year interest is compounded
Apr= 4%
So A (over or divided by)
(1+0.04/365)to the power of (365x8)
I need help with step by step actual calculation.

Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!
 

Hi,

 In General A%28t%29+=+P%281%2Br%2Fn%29%5E%28nt%29

A = Accumulated Amount $25,000

P= principal = 

r= annual rate = .04

n= periods per year = Assume Daily

t= years = 8

25000%2F%281%2B.04%2F365%29%5E%28365%2A8%29+=+P

25000%2F%281.000109%29%5E%282920%29+=+P = $18,154.04