An investment grows at a rate of 6% per year. How much, to the nearest $100, should Noel invest if he wants to have $100,000 at the end of 20 years?

Question

photon336 · Answer

A = P*r*t 

where  A is the final value of the investment P = the starting value, r = the rate in decimal form and t = time in years.

photon336 · Answer

We need to figure out how much he has to invest initially so we solve the equation for P the starting value. 

then you just plug in your values. 

$$\frac{ A }{ r*T } = P $$

lexy148 · Answer

yes i understand how to do these problems, the problem is idk how to solve it. i was thinking of it being A=100,000(1+.06)^20 but im not sure if thats the correct way to do it

photon336 · Answer

you need to find your original value invested

lexy148 · Answer

oh okay, so A would equal to 100,000?

photon336 · Answer

Is the interest compounded?

lexy148 · Answer

no it isnt compounded

satellite73 · Answer

solve $$P(1.06)^{20}=1000$$ for $P$

satellite73 · Answer

with a calculator, compute $$P=\frac{100,000}{(1.06)^{20}}$$

photon336 · Answer

Your final value should be 

$$\frac{ 100,000 }{ (1.06)^{20} }$$

photon336 · Answer

i'm wondering though why we can't also just use simple interest since it's not compounded @satellite73

lexy148 · Answer

okay so my answer should be 31,180

satellite73 · Answer

it says 6% per  year, all interest is compounded