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Popular Word Problems >

how much money should be deposited today in an account that earns 2.5% compounded monthly so that it will accumulate to 14000 in 4 years

Solution

h o w m u c h m o n ey s h o u l d b e d e p os i t e d t o d a y in an a cco u n t t ha t e a r n s 2.5% co m p o u n d e d m o n t h l y so t ha t i t w i ll a cc u m u l a t e t o 14000 in 4 ye a rs

Solution

Principal : 12669.04

Solution steps

Translate the problem into an equation:

14000 = P (1 + \frac{0.025}{12})^{12 \cdot 4}

Solve for

P, 14000 = P (1 + \frac{0.025}{12})^{12 \cdot 4} : P = 12669.04

Principal : 12669.04

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