Posted by **Dexter** on Sunday, April 11, 2010 at 8:40pm.

Barbara knows that she will need to buy a new car in 4 years. The car will cost $15,000 by then. How much should she invest now at 10%, compounded quarterly, so that she will have enough to buy a new car? Round to the nearest cent.

- math -
**Reiny**, Sunday, April 11, 2010 at 8:42pm
solve for x

x(1.025)^16 = 15000

- math -
**Dexter**, Sunday, April 11, 2010 at 8:50pm
im not sure how to complete the problem becuase my answer was 9312.82, not sure if this is correct

- math -
**Reiny**, Sunday, April 11, 2010 at 9:03pm
I have no idea how you got that.

I am using the standard formula

Amount = principal(1 + i)^n

where i is the periodic interest rate, and n is the number of interest periods

the rate is 10% p.a., compounded quarterly , so i = .10/4 = .025

and the time is 4 years or 16 quarter years, hence n = 16

so

x(1.025)^16 = 15000

x(1.484505621) = 15000

http://www.google.ca/search?hl=en&source=hp&q=1.025%5E16&meta=&aq=f&aqi=&aql=&oq=&gs_rfai=

x = 15000/1.484505621

= 10104.37

http://www.google.ca/search?hl=en&source=hp&q=1.025%5E16&meta=&aq=f&aqi=&aql=&oq=&gs_rfai=

- math -
**Dexter**, Sunday, April 11, 2010 at 9:08pm
ok i get it , thanks

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