How much would you need to invest to get $30,000 in 10 years for an account offering 2.54%
interest?
P(1.0254)^10 = 30000
solve for P
i still dont get how to do it
To determine how much you would need to invest to get $30,000 in 10 years with an account offering a 2.54% interest rate, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = Amount of money after interest
P = Principal amount (initial investment)
r = Annual interest rate (in decimal form)
n = Number of times the interest is compounded per year
t = Number of years
In this case, you want to find the value of P.
Rewriting the formula to solve for P:
P = A / (1 + r/n)^(nt)
Now, plug in the given values into the formula:
A = $30,000
r = 2.54% = 0.0254 (in decimal form)
n = 1 (compounded annually)
t = 10 years
P = $30,000 / (1 + 0.0254/1)^(1*10)
Calculating this expression step by step:
P = $30,000 / (1 + 0.0254)^(10)
P = $30,000 / (1.0254)^(10)
P = $30,000 / (1.28071)
P ≈ $23,422.64
Therefore, you would need to invest approximately $23,422.64 to accumulate $30,000 in 10 years with an account offering a 2.54% interest rate.