What formula do I use for this question?
A newly married couple wants to purchase a new home. They find an account that earns 5.3% interest compounded monthly. How much do they need to invest now in order to have a $10,000 down payment in 18 months?

Question

What formula do I use for this question?
A newly married couple wants to purchase a new home. They find an account that earns 5.3% interest compounded monthly. How much do they need to invest now in order to have a $10,000 down payment in 18 months?

anonymous · Answer

is it..

A=P(1+rt)
A=P(1+r/m)mt
A=R((1/r/m)mt-1/(r/m))

ganeshie8 · Answer

$$\huge 10,000 = x(1+\frac{0.053}{12})^{18}$$

anonymous · Answer

I just need the formula to use. out of those three?

ganeshie8 · Answer

if $x $  amount is invested now @ 5.3 % rate, after 18 months it becomes 10,000

ganeshie8 · Answer

ok lets see which formula fits

ganeshie8 · Answer

this works. 
A=P(1+r/m)mt

replace r= .053, m = 12, mt=12

anonymous · Answer

thats the formula?

ganeshie8 · Answer

yep..
one typo.. mt=18. its not 12

anonymous · Answer

okay thanks:)

ganeshie8 · Answer

because, t = 1.5 here.. thus mt=18