James knows that he eventually wants to buy a motorcycle, and the model he has in mind costs $5,000. He has found a bank that wi

Question

3 years ago

13

James knows that he eventually wants to buy a motorcycle, and the model he has in mind costs $5,000. He has found a bank that wi

ll let him open a saving account with 7% interest that is compounded monthly. If he wants to buy his motorcycle in 5 years (he's still nervous), how much money should he invest in the account now

Mathematics

1 answer:

svetlana [45] · Answer 1 · 2021-12-14T12:09:27+03:00

svetlana [45]3 years ago

4 0

Answer:

3527

Step-by-step explanation:

Using our compound interest formula we can plug in all of our given values and solve for P.

A(t)=P(1+r/n)^nt

5,000=P(1+0.07/12)^12(5)

P=5000/(1+0.07/12)^60

P≈$3,527