65000 = a (1 + .08)^7
log(a) = log(65000) - [7 log(1.08)]
How much must be deposited today into the following account in order to have $ 65000 in 7 years for a down payment on a house? Assume no additional deposits are made.
An account with annual compounding and an APR of 8%
3 answers
you use the formula
f= p*(1+(r/n))^nt
where f = future value
p=present value
r = rate
n = number of compounding periods per year
t = number of years
so you do
65000= p (1+0.08/12)^(12*7)
and you solve for p
f= p*(1+(r/n))^nt
where f = future value
p=present value
r = rate
n = number of compounding periods per year
t = number of years
so you do
65000= p (1+0.08/12)^(12*7)
and you solve for p
anonymous used monthly compounding, it said "compounded annually"
so
p = 65000/(1.08)^7 = 37926.87
(same answer that R_scott got with his log method)
so
p = 65000/(1.08)^7 = 37926.87
(same answer that R_scott got with his log method)
1 answer