Question

How much must you deposit today into the following accounts in order to have a $120,000\$ 120,000 college fund in 1515 years? Suppose that no additional deposits are made. An APR of 2.85%2.85 \%, compounded quarterly

Solution

Verified
Answered 1 year ago
Answered 1 year ago
Step 1
1 of 4

The goal is to determine the starting principal if the accumulated balance is $120000\$120000 for 1515 years with an annual percentage rate of 2.85%2.85\% compounded quarterly.

To determine the starting principal, apply this formula:

P=A(1+APRn)nYP=\dfrac{A}{(1+\frac{APR}{n})^{nY}}

where PP is the starting principal, AA is the accumulated balance, APRAPR is the annual percentage rate (as a decimal), nn is the number of compounding periods per year, and YY is the number of years.

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

Create an account to view solutions

By signing up, you accept Quizlet's Terms of Service and Privacy Policy
Continue with GoogleContinue with Facebook

More related questions

1/4

1/7