en

English

Español

Português

Français

Deutsch

Italiano

Русский

中文(简体)

한국어

日本語

Tiếng Việt

עברית

العربية

Popular Word Problems >

You want to have 100,000 when you retire in 10 years. If you can earn 5% interest compounded monthly, how much would you need to deposit now into the account to reach your retirement goal?

Solution

Y o u w an t t o ha v e 100, 000 w h e n yo u re t i re in 10 ye a rs . I f yo u c an e a r n 5% in t eres t co m p o u n d e d m o n t h l y, h o w m u c h w o u l d yo u n ee d t o d e p os i t n o w in t o t h e a cco u n t t o re a c h yo u r re t i re m e n t g o a l ?

Solution

Principal : 60716.1

Solution steps

Translate the problem into an equation:

100000 = P (1 + \frac{0.05}{12})^{12 \cdot 10}

Solve for

P, 100000 = P (1 + \frac{0.05}{12})^{12 \cdot 10} : P = 60716.1

Principal : 60716.1

Popular Examples

Find the future value and interest earned if 8704.56 is invested for 9 years at 6% compounded semiannually.The circumference of a circle is 16𝜋 centimeters. What is the area?The quotient of two more than the square of a number and the number.Suppose that 5500 is placed in an account that pays 2% interest compounded each year. Assume that no withdrawals are made from the account. Find the amount in the account at the end of 1 year.Megan opened a savings account and deposited 1,331.00. The account earns 1% interest, compounded quarterly. If she wants to use the money to buy a new bicycle in 3 years, how much will she be able to spend on the bike?