Question 89164: The Pearsons are planning to retire in 20 years and believe that they will need $200,000 in addition to income from their retirement plan. How much must they invest today at 7.5% compounded quartely to accomplish their goal?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The Pearsons are planning to retire in 20 years and believe that they will need $200,000 in addition to income from their retirement plan. How much must they invest today at 7.5% compounded quartely to accomplish their goal?
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A = P(1+r/n)^(nt)
200,000 = P(1+0.075/4)^(4*20)
200000 = P*4.419872484...
P = $45,250.17
This is the Princi;al that must be invested.
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Cheers,
Stan H.
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