Question 942665
Jorge Rodriguez would like to pay off his condo when he retires. How much must he invest now at 2.3% interest compounded quarterly to have $125,000 in 11 years? Round to the nearest whole dollar.
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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:
P=(to be determined)
r=.023
n=4
t=11
A=$125,000
..
{{{125000=P(1+.023/4)^(4*11)}}}
125000=P(1+.00575)^44
P=125000/(1.00575)^44
P=$97,129
How much must he invest now? $97,129