Pregunta
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Janelys is going to invest in an account paying an interest rate of compounded daily. How much would Janelys
need to invest, to the nearest ten dollars, for the value of the account to reach in 12 years?

Ask by Reyes Powers. in the United States
Jan 23,2025

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Janelys needs to invest approximately $930 to reach $1,890 in 12 years with a 5.9% daily compounded interest rate.

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Beyond the Answer

To find out how much Janelys needs to invest today (the present value), we can use the formula for compound interest:
Where:
  • = Present Value
  • = Future Value ($1,890)
  • = annual interest rate (5.9% or 0.059)
  • = number of times interest is compounded per year (daily, so 365)
  • = number of years (12)
Plugging the values into the formula gives:
First, calculate the interest rate per period and the total number of compounding periods:
Now, calculate the compound factor:
Calculating that exponent term:
Now compute the present value:
Rounding to the nearest ten dollars, Janelys would need to invest approximately $1,020 today to reach her goal of $1,890 in 12 years.

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