Question

Moxie wants to have $5000. money does she have to deposit in an account at 6% interest, compounded 3 times per year, in order to have $5000 at the end of 4 years?

Answer 1

Around 2488 dollars

Explanation:

If we set `x` to be the amount of money she deposited initially, then we get an equation:

`x*1.06^12=5000`

1.06 because her money is multiplied by 106% every time, and to the power of 12 because interest is compounded 3 times per year for 4 years.

So just solve for `x`:
`x=5000/(1.06^12)`

`x=5000/2.01` [2.01 is approximate]

`x≈2488`