please help!! i cant figure it out!
You would like to buy a car in 3 years that costs $12000. How much money do you need to invest in an account that pays 6% interest compounded quarterly?
points to first and most correct, with best explanation!!
thank youuuuuuuuuuuuuu!!!
2007-03-01 12:42:04 · 3 answers · asked by Anonymous in Education & Reference ➔ Homework Help
This question is definitely from a text book. In the real world inflation would drive up the cost of the car.
FV = PV((r/m)+1)^(N*m)
FV = Future Value
PV = Present Value
r = Interest Rate
m = Interest Distribution
N = Years
12,000 = PV( (0.06/4) + 1)^(3*4)
12,000 = PV(1.015)^12
Solve for PV. I have to go to bed.
This assumes 6% APR. You never stated it in the question. Got to go.
2007-03-01 12:56:42 · answer #1 · answered by InvisibleWar 2 · 0⤊ 0⤋
PRT- principle x rate x time = amount of interest
x stands for unknown principle
mulitply rate and time .06 x 12(number of quarters)
0.72X = 12000 - x(total needed minus principle)
1.72X = 12000 divide both side by 1.72
$6976.75 is what you would need to deposit.
check the math ALWAYS
6976.75 x .06 x 12 = 5023.26
5023.26 + 6976.75 = 12000.01
you come up a penny over but if you deposit $6976.74, you come up a penny short.
2007-03-01 21:06:24 · answer #2 · answered by Anonymous · 0⤊ 0⤋
I am assuming that you are taking Algebra and you need a formula. First, you need to know how many quarters in three years, (12). Second, you need to know how to calculate 6% interest, (1.06).
This is probably the formula that you need.
12 x (1.06 x D) = 120000
2007-03-01 20:56:07 · answer #3 · answered by Denise T 5 · 0⤊ 0⤋