How much would you have to invest into a 5 year certificate of deposit paying 2.3% compounded weekly to make it worth $4500 at the end of the term?
A=P(1+r/n)^nt
4500=P(1+0.023/52)^52(5)
I am receiving a syntax error please help
I agree with your equation and I get
$4011.25.
Beyond that, I can't help you since I don't know what you mean by "syntax" error.
The formula you are using to calculate the future value of an investment with compound interest is correct. However, the syntax error you are encountering might be related to the way you are inputting the formula into your calculator or spreadsheet.
Let's break down the formula and calculate it step by step:
A = P(1 + r/n)^(n*t)
Where:
A = Future value
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times interest is compounded per year
t = Number of years
In this case, the future value (A) is given as $4,500, the interest rate (r) is 2.3% (or 0.023 in decimal form), the compounding is weekly (n = 52), and the time period (t) is 5 years.
Substituting these values into the formula, we have:
4500 = P(1 + 0.023/52)^(52 * 5)
To solve for P, we need to rearrange the formula:
P = 4500 / (1 + 0.023/52)^(52 * 5)
Now let's calculate it using a calculator or spreadsheet:
P = 4500 / (1 + 0.023/52)^(52 * 5)
P ≈ $3653.95
Therefore, you would need to invest approximately $3,653.95 into the 5-year certificate of deposit paying 2.3% compounded weekly to make it worth $4,500 at the end of the term.