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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 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

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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