Jackie Rich would like to buy a $19,700 Toyota hybrid car in 5 years. Jackie wants to put the money aside now. Jackie’s bank offers 10% interest compounded semiannually.

How much must Jackie invest today?

Question

Jackie Rich would like to buy a $19,700 Toyota hybrid car in 5 years. Jackie wants to put the money aside now. Jackie’s bank offers 10% interest compounded semiannually.
     
How much must Jackie invest today?

anonymous · Answer

Jackie's bank is very generous.

Look into the compound interest formula; you know the final amount, the term, and the rate.

anonymous · Answer

$12,094.09