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How much money should I invest at an annually compounded interest rate of 5% so that I have 500,000$ in ten years? Express your answer as a dollar value rounded to the nearest cent.

 Jun 8, 2018
 #1
avatar+18000 
+1

FV = PV (1 + i)^n   

FV=future value = 500000

i = interest = .05

n = years = 10

PV= present value....the amount you have to invest now

 

500,000 = PV (1+.05)^10      Solve for PV

 Jun 8, 2018
 #2
avatar+99497 
+1

500,000  =  A (1.05)^10   divide both sides by (1.05)^10

 

500,000/(1.05)^10  = A ≈ 

 

$306,956,63

 

 

cool cool cool

 Jun 8, 2018
 #3
avatar+18000 
+1

Way to go Chris !  I knew you could do it with just a little help !    Haha.....

 Jun 8, 2018
 #4
avatar+99497 
0

I couldn't have done it without  your help, EP....LOL!!!

 

 

cool cool cool

CPhill  Jun 8, 2018

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