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How much would you need to deposit in an account now in order to have 6000 in the account in 10 years? Assume the account earns 8% interest compounded monthly.

Solution

Solution

Principal : 2703.14

Solution steps

Translate the problem into an equation:

6000 = P (1 + \frac{0.08}{12})^{12 \cdot 10}

Solve for

P, 6000 = P (1 + \frac{0.08}{12})^{12 \cdot 10} : P = 2703.14

Principal : 2703.14

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