John wants to have $2000 in 3 years. The current rate of return for a high interest savings account is 2.8%, compounded annually. How much must John invest now to have $2000 in 3 years?

6 years ago

Answered By Alireza R

V = P(1+r/n)^{(nt)}

V = the future value of the investment=2000P = the principal investment amountr = the annual interest rate=2.8%n = the number of times that interest is compounded per year=1t = the number of years the money is invested for=3

6 years ago

## Answered By Alireza R

V = P(1+r/n)

^{(nt)}V = the future value of the investment=2000P = the principal investment amountr = the annual interest rate=2.8%n = the number of times that interest is compounded per year=1t = the number of years the money is invested for=3

2000=P(1+ $\frac{2.8}{100}$2.8100 ) $^{\left(3\times1\right)}$

^{(3×1)}=P(1.086374)$\therefore$∴ P=1840.987

6 years ago

## Answered By Alireza R

V = P(1+r/n)(nt)

V = the future value of the investment=2000

P = the principal investment amount

r = the annual interest rate=2.8%

n = the number of times that interest is compounded per year=1

t = the number of years the money is invested for=3

2000=P(1+ $\frac{2.8}{100}$2.8100 ) $^{\left(3\times1\right)}$(3×1) =P(1.086374)

$\therefore$∴ P=1840.987