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Popular Word Problems >

A mutual fund pays 11% compounded monthly. How much should I invest now so that 7 years from now I will have 4300 in the account?

Solution

A m u t u a l f u n d p a ys 11% co m p o u n d e d m o n t h l y . Ho w m u c h s h o u l d I in v es t n o w so t ha t 7 ye a rs f ro m n o w I w i ll ha v e 4300 in t h e a cco u n t ?

Solution

Principal : 1997.95

Solution steps

Translate the problem into an equation:

4300 = P (1 + \frac{0.11}{12})^{12 \cdot 7}

Solve for

P, 4300 = P (1 + \frac{0.11}{12})^{12 \cdot 7} : P = 1997.95

Principal : 1997.95

Popular Examples

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