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 8% interest compounded monthly.

Answer 1

2000=P(1+.08/12)^12(10)

2000= P(1+.02/3)^120

P = 2000/(1.00666...)^120

use a calculator to solve for P

general formula is

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

where

A= ending Amount

P=beginning amount

r = annual interest rate

n= number of compounding periods per year

t = number of years