Answer:
$3363.30
Step-by-step explanation:
Let's begin with the compound amount formula:
A = P(1 + r/n)^(nt), where n is the number of times interest is compounded per year, t is the number of years, P is the initial investment amount, and r is the interest rate as a decimal fraction.
Solving for P, we get
A
P = ----------------------
(1 + r/n)^(nt)
and so, with A = $4,000, r = 0.029, n = 4 and t = 6, we get:
$4,000
P = ----------------------------- = ($4,000) / (1.00725^24) , or
(1 + 0.029/4)^(4*6)
P = $4,000 / 1.1893 = $3363.30
If you invest $3363.30 today, 2.9% compounded quarterly for 6 years, you will have $4000 after that period of time.
Answer:
$3363.30.
Step-by-step explanation:
The equation for the amount after 6 years is:
4000 = P( 1 + 0.029/4)^(6*4). where P is the amount you want to invest now.
P = 4000 / (1 + 0.029/4)^24)
= 3363.30
