Question

Adam wishes to have $17,000 available in 22 years to purchase a new car for his son as a gift for his college graduation. To accomplish this goal, how much should Adam invest now in a CD that pays 1.94% interest compounded monthlyHow much should Adam invest now? (Round to the nearest Cont as needed.)

Answer 1

Data:

Amount= $17000

time= 22 years

rate= 1.94%

n=12 months

$\begin{gathered} P=\frac{A}{(1+\frac{r}{n})^{(n\cdot t)}} \\ P=\frac{17000}{(1+\frac{0.0194}{12})^{(12\cdot22)}} \\ P=11097.9\approx11098 \end{gathered}$