Question

An investment company pays 7​% compounded semiannually. You want to have $24000 in the future. ​ How much should you deposit now to have that amount 5 years from​ now?

Answer 1

Answer: You should deposit about $17014 or little more

Step-by-step explanation:

use the compound interest formula.

A= p( 1 + r/n)^nt

Where A is the amount you will save over some  years .

p is the principal or start up  amount mostly known as the initial fee.

r is the interest rate represent by a decimal so 7% will be 0.07.

n is the number of times the interest is being applied annually. Semiannually means  twice.  So n will be 2.

T is the time the money will elapsed. So in 5 years the money will elapse. Now input the values into the formula and solve for p the principal.

24,000 = p( 1 + 0.07/2)^2*5

24,000= p( 1 + 0.035)^10

24000 = p( 1.035)^10

24000 = p( 1.41059876062)  Divide both sides by 1.41059876062

p = 17104  

Which means you should deposit about $17014 or little more