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How much money needs to be invested now to get $2000 after 4 years at 8% compounded quarterly? Express your answer to the nearest dollar.
criscardenas  Mar 10, 2012
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criscardenas:

How much money needs to be invested now to get $2000 after 4 years at 8% compounded quarterly? Express your answer to the nearest dollar.



4years = 16quarters
8% annual = 2% quarterly

$2000 = K0 * ( 1.02^16 ) + ( 1.02^16-1 ) / ( 1.02-1 )

[input]2000 = K0 * ( 1.02^16 ) + ( 1.02^16-1 ) / ( 1.02-1 )[/input]
K0=1443.313931763916981

taxes? inflation?
at current inflation rates of 6% and 30% taxes on investment income..
[input]2000 = K0 * ( (1+0.02*(1-0.3/4)-0.06/4)^16 ) + ( (1+0.02*(1-0.3/4)-0.06/4)^16-1 ) / ( (1+0.02*(1-0.3/4)-0.06/4)-1 )[/input]
K0 real=1875.729328061319077
admin  Mar 11, 2012

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