Question

Which investment should be made today to have $25,000 in an account if it is invested at 2.15% compounded monthly for 25 years.

Answer 1

14,619.88

Step-by-step explanation:

The investment today amount shall be calculated using the following formula:

F=P(1+i/n)^nt

F= total future amount which include interest+principal=$25,000

P=Amount that should be invested today

i=interest rate per year=2.15%

n=number of months in a year=12

t=time involved in investment in years=25

F=P(1+i/n)^nt

25,000=P(1+2.15%/12)^12*25

25,000=P(1.71)

P=14,619.88