Question

Compound interest is given by the formula A = P ( 1 + r ) t . Where A is the balance of the account after t years, and P is the starting principal invested at an annual percentage rate of r , expressed as a decimal. Alex is investing money into a savings account that pays 2% interest compounded annually, and plans to leave it there for 15 years. Determine what Alex needs to deposit now in order to have a balance of at least $40,000 in his savings account after 15 years. Alex will have to invest a minimum of $ now in order to have a balance of at least $40,000 in his savings account after 15 years. Round your answer to the nearest dollar.

Answer 1

Answer:

I think it is $889, if not than I didn't understand a task