Question

how much must you deposit in an account that pays 8% annual interest compounded monthly to have a balance of $1,000 after one year​

Answer 1

Answer:

$\ 923.36$  

Step-by-step explanation:

we know that

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=1\ year\\ A=\ 1,000\\ r=0.08\\n=12$  

substitute in the formula above  and solve for P

$\ 1,000=P(1+\frac{0.08}{12})^{12*1}$  

$P=\ 1,000/(1+\frac{0.08}{12})^{12*1}=\ 923.36$