Determine the principal P that must be invested at rate r = 3 1 2 %, compounded monthly, so that $700,000 will be available for retirement in t = 15 years. (Round your answer to the nearest cent.)

Answer 1

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

A = ending Amount= $700,000

P - starting Principal

r= interest rate = 3 1/2%= .035

n = number of compounding periods annually= 12

t = years = 15

plug in the numbers, solve for P

700000 = P(1+.035/12)^12(15)

P = $414,405.30 rounded up to nearest cent