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Jamal wants to save $54,000 for a down payment on a home. How much will he need to
Chapter 6, Problem 65(choose chapter or problem)
Jamal wants to save $54,000 for a down payment on a home. How much will he need to invest in an account with 8.2% APR, compounding daily, in order to reach his goal in 5 years?
Questions & Answers
QUESTION:
Jamal wants to save $54,000 for a down payment on a home. How much will he need to invest in an account with 8.2% APR, compounding daily, in order to reach his goal in 5 years?
ANSWER:Step 1 of 2
The objective is to find the amount Jamal has to invest in order to reach his goal of \($54,000\) in 5 years
The compound interest formula is,
\(P=A(t)\left[1+\frac{r}{n}\right]^{-nt}\)
The account is worth \(A = $54000\)
The annual percentage rate is \(r=8.2 \%\)
that is;
\(r=\frac{8.2}{100}\)
\(=0.082\)
The interest is compounded daily \(n = 365\).