Answer:
The amount you need to invest in a year is $951.3
Step-by-step explanation:
Consider the provided information.
The future value can be calculated as:
Where, <em>A</em> represents future value, <em>P</em> represents Principal value, <em>r </em>represents interest rate in decimal, <em>n</em> represents number of time interest is compounded and <em>t</em> represents time in years.
Now use the above formula to find the money needed to invest i.e <em>P</em>.
Substitute, <em>n</em> = 12 , <em>t </em>= 1, <em>A </em>= 1000 and <em>r</em> = 5% or 0.05 in the above formula.
Thus, the amount you need to invest in a year is $951.3