Question 970393: how much money should be deposited today in an account that earns 8% compounded semiannually so that it will accumulate to 14,000$ in three years?
Answer by lwsshak3(11628)   (Show Source):
You can put this solution on YOUR website! how much money should be deposited today in an account that earns 8% compounded semiannually so that it will accumulate to 14,000$ in three years?
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compound interest formula: A=P(1+r/n)^nt, P=initial investment, r=interest rate, n=number of compounding periods per year, A=amount after t-years
For given problem:
r=8%
n=2
t=3
A=14000
..
14000=P(1+.08/2)^2*3
14000=P(1.04)^6
P=14000/1.04^6
P=11064.40
how much money should be deposited today? $11,064.40
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