Final answer:
To have $1100 in your account 10 years later with a 7% interest rate compounded monthly, you would need to deposit approximately $671.63.
Step-by-step explanation:
To find out how much money you need to deposit in an account with a 7% interest rate, compounded monthly, to have $1100 in your account 10 years later, you can use the compound interest formula:
A = P(1 + r/n)^(nt)
Where:
- A is the future value (in this case, $1100)
- P is the principal amount (the amount you need to find)
- r is the annual interest rate (7% = 0.07)
- n is the number of times the interest is compounded per year (12, since it's compounded monthly)
- t is the number of years (10)
Plugging in the values, we get:
$1100 = P(1 + 0.07/12)^(12*10)
Solving for P, we find that you would need to deposit approximately $671.63 to have $1100 in your account 10 years later.