Math question help

Question

JimJim

Roznowski wants to invest some money now to buy a new tractor in the future. If

hehe

wants to have

​$225,000

available in

4

​years, how much does

he

need to invest now in a CD paying

5.45​%

interest compounded

monthly



Answer 1

If S = the amount in 4 years

S_o = the initial amount invested

t = time in years

n = number of periods in a year

Then

S = S_o(1 + I/n)^(nt)

225,000 = S_o(1.00454)⁴⁸

S_o = $181,017.54