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how much must be deposited today into the following account in order to have 60000 dollars in 6 years for a down payment on a house. assume no additional deposits are made. an account with quarterly compounding and an APR of 4.2%. how much should be deposited today

Solution

Solution

Principal : 46695.99

Solution steps

Translate the problem into an equation:

60000 = P (1 + \frac{0.042}{4})^{4 \cdot 6}

Solve for

P, 60000 = P (1 + \frac{0.042}{4})^{4 \cdot 6} : P = 46695.99

Principal : 46695.99

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