Question

I am having the most difficult time trying to understand a problem with the formula a=pe^rt, where A=amount accumulated, p=principal, r=interest rate, and t=time in yrs.
What principal should be deposited at 7.405% to ensure the account will be worth $18,000 in 11 years

Answer 1

18,000 = p(1+.07405)^11

Answer 2

So 18,000=(1p+7405p)^11, right?

Answer 3

First step would be to add (1 + .07405) to get 1.07405

Then take that to the ^11

Answer 4

2.194166065

Answer 5

I thought the formula was A= p/e^rt

Answer 6

Good

now you have 18,000 = 2.194166065p

so divide both sides by 2.194166065

Answer 7

8203.572322= p

Answer 8

or $8203.57?

Answer 9

OK.. we can do it your way... just a minute.

Answer 10

18,000 = P e^(.07405*11)
18,000 = Pe^.81455
18,000 = P 2.258

Divide by 2.258

$7971.66

Answer 11

How do you calculate e?

Answer 12

I plugged it into the calculator... I have an e^x key.

Answer 13

Wait just a minute

Answer 14

Also the ln key right?

Answer 15

Ok, I got the same thing you got this time.

Answer 16

I am not used to the e function.. here is an example, I will do yours for you following this example

So 130000 = 1949 e^(.00835 t)
Take logs of both sides:
ln 130000 = ln 1949 e^(.00835 t)
= ln 1949 + ln e^(.00835 t)
= ln 1949 + .00835 t
t = (ln 130000 - ln 1949) / .00835
= (ln 130000/1949) / .00835
which you have to calculate using a calculator

Answer 17

18,000 = Pe^(.07405 * 11)
18,000 = Pe^.81455
ln 18000 = ln P + ln(e^.81455)
ln 18000 = ln P + .81455
9.79813 - .81455 = ln P
8.98358 = ln P
e^8.98358 = e^ (ln P)
$7971.12 = P

Answer 18

ok. It was the "e" part that was throwing me off. But what you and I got is what the book has also.

Answer 19

Great... A little out of my league... but I am glad we got it.

Answer 20

Now, with the formula with A =p(1+r/n)^nt
A = $982500 p+71500, t=17yr

Answer 21

Don't we have to know either r or n?

Answer 22

I have 98, 2500=71, 500(1+r/n)^17. Do you know how I would find r/n?

Answer 23

R is what they are asking for. R is a percent

Answer 24

What is n?

Answer 25

Here's the question:
For compound interest accts, the amount A accumulated or due depends on the principal p, interest rate r, number of compounding per year n, and the time t in years according to the formula A=p(1 + r/n)^nt.
Find the r given A=$98, 250, p=71,500, and t=17 yr with interest compound monthly

Answer 26

compounded monthly means that n = 12

Answer 27

982,500 = 71500(1 + r/12)^12*17

Answer 28

oh, because 12 represent the "per year"

Answer 29

982,500 = 71,500(1 + r/12)^204

Answer 30

divide both sides by 71,500

Answer 31

13.7412587 = (1 + r/12)^204

Answer 32

13.
74128874=(1+r/12)^204

Answer 33

Now you have to get rid of the ^204 you do that by taking the 204th root of both sides. Use the x sqrt(y) key on your calculator

Answer 34

1.012927965 = 1 + r/12

Answer 35

Subtract 1 from both sides

Answer 36

.012927965 = r/12

Answer 37

multiply both sides by 12

Answer 38

12.155 = r

Answer 39

ON the step with the sq rt of 13.7412587 I got an error msg

Answer 40

Your saying 204 sq rt 13.7412587 correct?

Answer 41

You are not taking the sqrt root..

Find the key that has x sqrt(y)

type in 13.7412587 hit the xsqrt(y) key and then type in 204 and hit enter

Answer 42

I dont believe I have that key

Answer 43

Are you operating a TI-84?

Answer 44

NO.. just a calculator on my computer the basic one..

Answer 45

Let me see if I can find a TI-84 on line and tell you what it looks like

Answer 46

How about under MATH option 5 does it show an x and then a radical sign

Answer 47

yes

Answer 48

You want the x to be the 204 and under the radical sign to be the 13.xxxxxx

Try it and see if you can get what I got.

Answer 49

YES!!!! I got it! such a relief! thank you very much