How much would you need to deposit in an account now in order to have $4000 in the account in 15 years?

Question

How much would you need to deposit in an account now in order to have $4000 in the account in 15 years? Assume the account earns 5% interest compounded monthly. Round to the nearest cent.

Answer 1

4000=P(1+.05/12)^12(15)

4000 = P(1.0041666...)^180

4000=about P(2.1137)

P = 4000/2.1137 = $1892.42