Question 1192292
f = p * (1 + r) ^ n
f is the future value
p is the present value
r is the interest rate per time period.
n is the number of time periods.


2.05% compounded monthly becomes .0205/12.
the formula uses the rate, not the percent.


4 years * 12 months per year = (4 * 12) months.


formula becomes:


1300 = p * (1 + .0205/12) ^ (4 * 12)


solve for p to get:


p = 1300 / ((1 + .0205/12) ^ (4 * 12)) = 1197.737339.


round to the nearest penny to get 1197.74.


that's how much she needs to invest today at 2.05% per year compounded monthly so that she can have 1300 at the end of the 4 year investment period.