Luanne wants to have $3275 in her bank account in 10 years. How much money should she deposit if her account earns 7.5% interest

Question

crimeas [40]

3 years ago

11

Luanne wants to have $3275 in her bank account in 10 years. How much money should she deposit if her account earns 7.5% interest

which is compounded every month?
A. $1589.01
B. $2159.45
C. $1921.53
D. $1550.62

Mathematics

2 answers:

Mekhanik [1.2K] · Answer 1 · 2022-05-11T04:12:30+03:00

Mekhanik [1.2K]3 years ago

8 0

A. $1589.01

I solved this by a simple trial and error by inputing each answer into the equation.

Ray Of Light [21] · Answer 2 · 2022-05-11T05:34:12+03:00

Total = Principal * (1 + rate/12)^years*12
Solving for Principal
Principal = Total / (1 + rate/12)^years*12
Principal = $3,275 / (1.00625)^120
Principal = $3,275 / 2.1120646371 
Principal = 1,550.62
And here's a calculator to check that answer:
http://www.1728.org/compint.htm