Help with algebra question?

Question

How much money should you invest now at an annual interest rate of 2.5% compounded monthly if you want $45,000, 20 years in the future? 

 

We have to use the formula  F=P(1+i)^n. I just need help figuring out which numbers go where.

 

So far I have it, and I'm wondering if it's right or not.

 

P= ?

A= 45,000

n= 240

i= .025/12 = .002083333 

Answer 1

You have all the values needed to put into the formula.  When you do, you simply solve for P (you'll have to divide out its numerical coefficient).

 

When you get your answer, put it back into the formula and see if you get the Correct A value.  Do not do any roundoff until the end of your work.