Question

---> Reagan has a savings account that earns 1.87% interest, compounding quarterly. If she needs $20,857 for a down payment on a house in nine years, how much money will she need to invest in the account today?

Answer 1

$10,704.95

$17,633.17

$19,355.32

$20,508.99

Answer 2

Using the compound interest formula
\[20857=x(1+\frac{0.0187}{4})^{36}\]
\[x=\frac{20857}{1.004675^{36}}\]
Where x = the amount needed to invest today.
Can you calculate x ?

Answer 3

17,633.17

Answer 4

That's correct. Good work :

Answer 5

Thank you (:

Answer 6

You're welcome :)