Investment and compounding help

Question

jane roznowski wants to invest some money now to buy a new tractor in the future. if she wants to have ​$350,000 available in 3 ​years, how much does she need to invest now in a cd paying 4.55​% interest compounded monthly​?

Answer 1

Let's lay this out.

3 years = 36 compounding periods. If we put X dollars in a CD today = will be Worth

X((1+i/12)³⁶) in 3 years. We want this the be 350,000.

so X((1.+.0455/12)³⁶= 350,000

X= 350,000/ ((1+.0455/12)³⁶)

I'll let you do the calculations.

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