Question

How much would you need to deposit in an account now in order to have $20,000 in the account in 6 years? Assume the account earns 4% interest. Round your answer to the nearest penny

Answer 1

Answer:

P = $17,750.074

Step-by-step explanation:

amount (A)  = $20,000

rate of interest= 4%

time (t) = 6 year

principle (P) = ?

$A=P (1+\frac{r}{100})^{t}$

$20000=P (1+\frac{4}{100})^{6}$

$P=20000\times (\frac{25}{26})^6$

on solving we get

P = $17,750.074

hence we have to deposit $17,750.074 to get $20,000 in the account after 6 years.