Mike would like to have $25,000 in 4 years to pay off a balloon payment on his business mortgage . His money market account is paying 1.825% compounded daily. disregarding leap years, how much money must mike put in his account now to achieve his goal? Round nearest whole dollar.

P = Po(1+r)^n = $25,000

r = (1.825%/365)/100% = 5*10^-5 = Daily
% rate expressed as a decimal.

n = 365Comp./yr. * 4yrs. = 1460 Compounding periods.

Po(1.00005)^1460 = 25000
Po = 25,000/1.00005^1460 = $23,240.

To determine how much money Mike must put in his money market account now to achieve his goal of having $25,000 in 4 years, we can use the compound interest formula:

A = P(1 + r/n)^(nt)

Where:
A = total amount after time t
P = principal amount (initial investment)
r = annual interest rate (in decimal form)
n = number of times interest is compounded per year
t = time in years

In this case, Mike wants to have $25,000 (A) in 4 years (t). The annual interest rate (r) is 1.825%, which needs to be converted to decimal form (0.01825). The problem states the interest is compounded daily, so n = 365 (days in a year).

Now let's solve for P:

A = P(1 + r/n)^(nt)
25000 = P(1 + 0.01825/365)^(365*4)

Next, we simplfy the equation:

25000 = P(1 + 0.00005)^(1460)
25000 = P(1.00005)^(1460)

To isolate P, we divide both sides of the equation by (1.00005)^(1460):

P = 25000 / (1.00005)^(1460)

Using a calculator or a spreadsheet, we can compute P:

P ≈ $22,232.90

Therefore, Mike must put approximately $22,232.90 into his money market account now to achieve his goal of having $25,000 in 4 years.