Wendy wants $15,000 saved in 6 years to make a down payment on a house. How much money should she invest now at 4.65% compounded annually in order to meet her goal?

Question

asked Feb 23, 2017 145k views

1 Answer

Thiruvenkadam · Answer 1 · 2017-03-01T02:10:49+0000

A=P(1+R/100)^n
A=$15000, n=6 years, R=4.65
Therefore,
15000=P(1+4.65/100)^6
15000=P(1.3135)
P=15000/1.3135
=$11420 (to the nearest dollars)