Question

If you need to have $5,000 in 18 months and you have found an investment vehicle that will yield 4.5% interest compounded monthly, how much do you need to invest?

Answer 1

\[A = P (1 + \frac{ r }{ n })^{nt}\]

Where A is the amount you are solving for.
P is the Principal amount, Amount first put in, (5000)
r is rate of interest as a decimal (4.5% = .045)
n is number of times compounded per year (monthly = 12)
t is number of years (18 months = 1.5 years)

Plug it in and solve.