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Katyanochek1 [597]
3 years ago
8

You want to have $35,000 in cash to buy a car 3 years from today. you expect to earn 3.6 percent, compounded annually, on your s

avings. how much do you need to deposit today if this is the only money you save for this purpose
Mathematics
1 answer:
GREYUIT [131]3 years ago
5 0
The appropriate formula to use here is

A = P (1 + r)^t, 
where A is the final amount, P is the initial amount, r is the annual interest rate as a decimal fraction, and t is the number of years (number of compounding periods).

Substituting the givens:  $35000 = P(1+0.036)^3

                                   $35000
Solving for P:  P = ----------------- = $31476.67    (answer)
                                (1.036)^3
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