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How much money should be deposited today in an account that earns 4% compounded monthly so that it will accumulate to $8000 in three years? The amount of money that should be deposited is $ 1. (Round up to the nearest cent.)

Respuesta :

JeanaShupp

Answer: $7105.27

Step-by-step explanation:

Given : The Principal amount : P= $8000

Rate of interest : r=4% = 0.04

Time : t= 3 years

The formula to find the compound amount compounded monthly is given by :-

[tex]A=P(1+\dfrac{r}{12})^{12t}[/tex]

i.e. [tex]8000=P(1+\dfrac{0.04}{12})^{12\times3}[/tex]

i.e. [tex]8000=P(1.12592442594)[/tex]

i.e. [tex]P=\dfrac{8000}{1.12592442594}[/tex]

i.e. [tex]P=7105.27262371\approx7105.27[/tex]

Hence, the amount of money that should be deposited is $ 7105.27

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