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Popular Word Problems >

An investment company pays 9% compounded semiannually. You want to have 14,000 in the future. How much should you deposit now to have that amount 5 years from now?

Solution

implicit derivative

in v es t m e n t co m p an y p a ys 9​% co m p o u n d e d se miann u a ll y . Y o u w an t t o ha v e 14, 000 in t h e f u t u re . Ho w m u c h s h o u l d yo u d e p os i t n o w t o ha v e t ha t am o u n t 5 ye a rs f ro m ​ n o w ?

Solution

Principal : 9014.99

Solution steps

Translate the problem into an equation:

14000 = P (1 + \frac{0.09}{2})^{2 \cdot 5}

Solve for

P, 14000 = P (1 + \frac{0.09}{2})^{2 \cdot 5} : P = 9014.99

Principal : 9014.99

Popular Examples

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