Josefa wants 5,000 saved in 2 years to make a down payment on a house. How much money should she invest now at 4.45% compounded annually in order to meet her goal?

Solution

Josefa wants 5, 000 saved in 2 years to make a down payment on a house. How much money should she invest now at 4.45% compounded annually in order to meet her goal?

Solution

Principal : 4583.03

Solution steps

Translate the problem into an equation:

5000 = P (1 + \frac{0.0445}{1})^{1 \cdot 2}

Solve for

P, 5000 = P (1 + \frac{0.0445}{1})^{1 \cdot 2} : P = 4583.03

Principal : 4583.03

Popular Examples

Taylor invested 650 in an account paying an interest rate of 2.3% compounded daily. Assuming no deposits or withdrawals are made, how long would it take, to the nearest tenth of a year, for the value of the account to reach 880?four times one number added to another number is 36. three times the first number minus the other number is 20. find the numbers The sum of 5 times a number and 6 is 2 the radius of a circle is 12 feet what is the circles area Spencer deposited 10 in an account earning 5% interest compounded annually.To the nearest cent, how much will he have in 3 years?