Walmart company estimates that the computer they plan to buy in 18 months will cost $4,200.

Walmart company estimates that the computer they plan to buy in 18 months will cost $4,200. How much money should be deposited now into an account paying 5.75 % interest, compounded monthly so there will be enough money to pay cash for the computer in 18 months?

Walmart company estimates that the computer they plan to buy in 18 months will cost $4,200. How much money should be deposited now into an account paying 5.75 % interest, compounded monthly so there will be enough money to pay cash for the computer in 18 months?

Compound interest formula:

A = P(1+r/n)^(nt)

P = principal amount (what we're looking for)

r = annual rate of interest (.0575)

t = number of years the amount is deposited or borrowed for. (18months translate to 1.5 years)

A = amount of money accumulated after n years, including interest. (4200)

n = number of times the interest is compounded per year (12)