math help please

Question

Abby Ellen wants to attend Ithaca College. She will need $75,000 6 years from today. Assume Abby's bank pays 6% interest compounded semi-annually. What must Abby deposit today to have $75,000 in 6 years? 



Answer 1

75000 =P(1+.06/2)^2(6)

P =75000/(1.03)^12= $52,603.49 needed to have $75,000 in 6 years at 6% compounded twice a year

general formula is

A=P(1+r/n)^nt where r= interest rate, n=number of compounding periods per year, t= number of years, P= initial investment. A = Amount in t years at r interest compounded n times per year