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.

bruis11 Jun 8, 2018

#1**+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

ElectricPavlov Jun 8, 2018

#2**+1 **

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

500,000/(1.05)^10 = A ≈

$306,956,63

CPhill Jun 8, 2018

#3**+1 **

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

ElectricPavlov Jun 8, 2018