A company will need $35,000 in 8 years for a new addition. To meet this goal, the company deposits money in an account today that pays 6% annual interest compounded quarterly. Find the amount that should be invested to total $35,000 in 8 years.
I know the formula is
A=P(1+.06/4)^8
A=35000(1+.015)^8
A=35000(1.015)^8
A=35000(1.1264925866)
A=39427 (rounded to nearest dollar) Is this correct?

Question

A company will need $35,000 in 8 years for a new addition.  To meet this goal, the company deposits money in an account today that pays 6% annual interest compounded quarterly.  Find the amount that should be invested to total $35,000 in 8 years.  
I know the formula is 
A=P(1+.06/4)^8
A=35000(1+.015)^8
A=35000(1.015)^8
A=35000(1.1264925866)
A=39427 (rounded to nearest dollar)  Is this correct?

mertsj · Answer

The formula is:
$$A=P(1+\frac{r}{n})^{nt}$$

anonymous · Answer

That's what I did I thought  A=35000(1+6%/4)^8(years)

anonymous · Answer

the 6%/4(quarterly)

mertsj · Answer

What is n?

anonymous · Answer

yeah

mertsj · Answer

yeah is not a valid replacement for n

anonymous · Answer

the rate being 6% annually and the n being quarterly for 4 quarters in a year

mertsj · Answer

Are you saying that n is 4?

anonymous · Answer

yes

mertsj · Answer

Then what is nt?

anonymous · Answer

then the exponent is 8 for 8 years right?

mertsj · Answer

It's a fairly simple concept.  n = 4, t = 8, nt=32.
The exponent is nt.  Therefore the exponent is 32

anonymous · Answer

oh...Ok let me figure this out LOL

anonymous · Answer

$56,361 ?

mertsj · Answer

Did you read the problem?

anonymous · Answer

yeah it said to round to the nearest dollar

mertsj · Answer

Do you really think it makes sense to say they must invest more now then they will need in 8 years?   Are they going to lose money on this investment or what?

anonymous · Answer

Ok now I am really confused...A=35000(1+0.06/4)^32  This is correct right?

mertsj · Answer

The AMOUNT they need in 8 years is 35000.  What PRINCIPAL should they invest now so that the AMOUNT they will have in 8 years is 35000?

anonymous · Answer

GRR I so dumb  35000=P(1+.06/4)^32

anonymous · Answer

I wasn't even picking up on that..

anonymous · Answer

Ok next would be 35000=P(1.015)^32 then
35000=P(1.6103243202)  This is where I am getting stuck

mertsj · Answer

Solve this equation:
24=6x

anonymous · Answer

6*4=24

mertsj · Answer

How did you get that?

anonymous · Answer

multiplication

anonymous · Answer

$21,734

mertsj · Answer

The correct answer (which you would know if you had followed the instructions of your algebra I instructor to show your work) is "divide both sides by 6.

anonymous · Answer

divide 35000 by 1.6103243202

anonymous · Answer

Im not taking Algebra I am in MATH 156 how to teach elementary math this was the only problem I was stuck on =o)

anonymous · Answer

I realized that I after you pointed out that I put the 35000 in the wrong spot...Thanks for the help!!!

mertsj · Answer

Good for you and you are welcome.