Compound interest is given by the formula A = P ( 1 + r ) t A=P(1+r)t. Where A A is the balance of the account after t t years,
and P P is the starting principal invested at an annual percentage rate of r r, expressed as a decimal. Evan is investing money into a savings account that pays 5% interest compounded annually, and plans to leave it there for 10 years. Determine what Evan needs to deposit now in order to have a balance of $30,000 in his savings account after 10 years. Evan will have to invest $ now in order to have a balance of $30,000 in his savings account after 10 years. Round your answer UP to the nearest dollar.
Total = principal * (1 + rate) ^ years Solving for principal: principal = total / [(1 + rate) ^ years] principal = 30,000 / (1.05)^10 principal = 30,000 /
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1.6288946268
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principal =
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18,417.</span></span></span>40
