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Megan wants to save \$4, 000 for a down payment on a car. To the nearest dollar, how much will she need to invest in an account now with 7.4% APR, compounded daily, in order to reach her goal in 3 years?

Solution

Megan wants to save $4, 000 for a down payment on a car. To the nearest dollar, how much will she need to invest in an account now with 7.4% APR, compounded daily, in order to reach her goal in 3 years?

Solution

Amount : 4994.17

Solution steps

Translate the problem into an equation:

A = 4000 (1 + \frac{0.074}{365})^{365 \cdot 3}

4000 (1 + \frac{0.074}{365})^{365 \cdot 3} = 4994.17313 \dots

Round to the nearest hundredth:

4994.17

Amount : 4994.17

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