how much must you deposit in an account that pays 8% interest,compounded monthly to have a balance of $1000 after three years?

Mathematics

1 answer:

NNADVOKAT [17]3 years ago

5 0

<h3>Answer: 787.25 dollars</h3>

=============================

Work Shown:

A = final amount after t years = 1000

P = initial deposit = unknown

r = interest rate in decimal form = 0.08

n = compounding frequency = 12

t = number of years = 3

-----

A = P*(1+r/n)^(n*t) is the compound interest formula

1000 = P*(1+0.08/12)^(12*3)

1000 = P*1.27023705162066

1.27023705162066P = 1000

P = 1000/1.27023705162066

P = 787.254629932364

P = 787.25 rounding to the nearest penny

----

note: this assumes that the interest rate stays at 8% the entire three year period; also, you cannot withdraw any money from the account during this time period.

You might be interested in

A customer deposits $500 in an account that pays 4% annual interest. what is the balance after 3 years if the interest is compou

docker41 [41]

Going to add on to your variables for the sake of the formula.

Let A = the amount after T years.
P = Principal amount

$A = P(1 + \frac{r}{n})^{nt}$

$A = 500(1 + \frac{0.04}{1})^{1(3)}$

$A = 500(1 + \frac{0.04}{1})^{3}$

$A = 562.432$ or ≈ $562.43

The customer would have $562.43 at the end of 3 years.

4 0

3 years ago

Read 2 more answers

Marco has a bag of 50 colored marbles.there are 12 blue marbles,18 black marbles,and 20 red marbles.what is the ratio of the num

iren2701 [21]

The answer is 2:3 because it is 12:18 simplified.

8 0

2 years ago

Two addends

nataly862011 [7]

Answer:

Step-by-step explanation: