Question
Asked Nov 8, 2019
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Use the present value formula to determine the amount to be invested​ now, or the present value needed

The desired accumulated amount is $40,000 after
12 years invested in an account with 2.2​% interest compounded monthly.

The amount to be invested​ now, or the present value​ needed, is ​$__

Round to the nearest cent as needed

 

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Expert Answer

Step 1

Recall the following fact.

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nt Compound Amount = P1+ where P is the Principal amount i is the annual interest rate n is the number of years t is the number of times compounded per year

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Step 2

Substitute the given values and compute the co...

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Compound Amount = $40,000, n =12, t = 12 and i = 2.2% nt = P Compound Amount 12x12 0.022 40000 P 1 12 40000 P 12x12 0.022 1+ 12 40000 144 12.022 12 = $30,726.37

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Math

Advanced Math