can u help on these?

How much should you invest now at 10% annual interest raate to have $8000 toward the purchase of a car in 5 years if the interest in compounded quaterly?

Question

can u help on these?

How much should you invest now at 10% annual interest raate to have $8000 toward the purchase of a car in 5 years if the interest in compounded quaterly?

amistre64 · Answer

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

amistre64 · Answer

that got typoed lol

amistre64 · Answer

A/(1+r/n)^(nt) = P thats better:  or with latex we get:

$$\frac{A}{(1+\frac{r}{n})^{nt}}=P$$

amistre64 · Answer

in this case:

A = 8000
r = .08
t = 5
n = 4, since its compounded quarterly

amistre64 · Answer

r = 10% ... bummer;  change that to r=.10  NOT .08

amistre64 · Answer

google does this for us: 8000/(1+.10/4)^(4*5) = 4,882.167... http://www.google.com/search?sourceid=chrome&ie=UTF-8&q=8000%2F(1%2B.10%2F4)^(4*5)