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Popular Word Problems >

To help with his child’s college fund, John needs to invest. Assuming an interest rate of 2.27% compounded monthly, how much would he have to invest to have 83,700 after 14 years?

Solution

T o h e lp w i t h hi s c hi l d ’ s co ll e g e f u n d, J o hn n ee d s t o in v es t . A ss u min g an in t eres t r a t e o f 2.27% 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 h e ha v e t o in v es t t o ha v e 83, 700 a f t er 14 ye a rs ?

Solution

Principal : 60930.82

Solution steps

Translate the problem into an equation:

83700 = P (1 + \frac{0.0227}{12})^{12 \cdot 14}

Solve for

P, 83700 = P (1 + \frac{0.0227}{12})^{12 \cdot 14} : P = 60930.82

Principal : 60930.82

Popular Examples

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