For Ann and Tom to have $20,000 at the end of 10 years, they must deposit a sum of $6,131.14.
<h3>What is the principal?</h3>
To calculate the sum of money they must deposit, use the compound interest formula.
From the compound interest formula;
P = A / ( 1 + r/n )^(nt)
Given that;
- Final amount A = 20,000
- Interest rate r = 12% = 12/100 = 0.12
- Compound n = quarterly = 4
- Time t = 10 years
- Principal P = ?
P = A / ( 1 + r/n )^(nt)
P = 20,000 / ( 1 + 0.12/4 )^(4×10)
P = 20,000 / ( 1.03)^40
P = 20,000 / 3.26203779
P = $6,131.14
Therefore, for Ann and Tom to have $20,000 at the end of 10 years, they must deposit a sum of $6,131.14.
Learn more about compound interest here: brainly.com/question/27128740
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