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Brandon is going to invest in an account paying an interest rate of compounded annually. How much would
Brandon need to invest, to the nearest ten dollars, for the value of the account to reach in 8 years?

Ask by Gibson Bradley. in the United States
Jan 27,2025

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Answer

Brandon needs to invest approximately $48,150 to reach $69,000 in 8 years with a 4.6% annual interest rate compounded annually.

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Mind Expander

To find out how much Brandon needs to invest today (the present value), we can use the formula for compound interest:
Where:
  • is the amount of money accumulated after n years, including interest.
  • is the principal amount (the initial amount of money).
  • is the annual interest rate (decimal).
  • is the number of years the money is invested or borrowed.
Here, we know , , and . We need to rearrange the formula to solve for :
Plugging in the values:
Calculating :
Now, substitute this back into the equation for :
Rounding to the nearest ten dollars, Brandon would need to invest approximately .
So, the answer is that Brandon needs to invest around to achieve his goal.

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