A company will need $30,000 in 5 years. to meet this goal they will need to deposit money in an account that pays 7% annual interest compound quarterly. find the amount that will be invested to total $30,000 in 5 years.

Question

anonymous · Answer

isnt the compound interest with the formula:
$$
A=P\left(1+{r\over100k}\right)^{nk}
$$
r = annual rate in %
k = number of times compounded per year
n = number of years
A = amount after all the n years
P = principal amount

anonymous · Answer

we are asked to find the "P"

anonymous · Answer

ok i was using the A=P(1+r)^n

anonymous · Answer

you can use that when the principal is compounded "yearly" i.e., once a year
but in this problem, it is compounded quarterly.. i.,e., 4 times a year

anonymous · Answer

oh maybe thats why i cant get it lol

anonymous · Answer

so i had 30,000=P(1+0.02)^20
 is that right?

anonymous · Answer

the paranthesis is incorrect

anonymous · Answer

ok im lost..what part of it is correct?

anonymous · Answer

show me your equation before simplifying.

anonymous · Answer

$$
30000=P\left(1+{7\over 100\times4}\right)^{5\times4}
$$

anonymous · Answer

sorry i was trying to work it out.  so what you just did isnt like what I did. so that would be
30000=P(1+7/400)^20?

anonymous · Answer

I just plugged in the numbers in the formula I showed in the first post

anonymous · Answer

kapeesh?