How much would you need to deposit in an account now in order to have $2000 in the account in 10 years? Assume the account earns 2.8% interest compounded weekly.

Answer 1

The formula for this is P=A(1+r/n)^-nt where

P is the amount invested now,

A is the amount in the future,

r is the interest rate, in decimal form,

n is the number of compounding periods in one year, and

t is the number of years

Here we are solving for P and we need $2000 in the future, so A=2000. The interest rate is 2.8%, so r=.028, and it's compounded weekly, so n=52. We have 10 years to get the money, thus t=10.

P=2,000(1+.028/52)^-(52)(10) = 1511.68

Be careful not to round any numbers until you get your final answer.