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Mr. smith wishes to retire in 11 years. when he retires he would like to have $500,000 in his bank account. mr. smith's bank pays 6% per year compounded annually. how much should he deposit now to attain his goal?

Respuesta :

Aliwohaish12
The formula is
A=p (1+r)^t
A future value 500000
P present value. ?
R interest rate 0.06
T time 11 years
Solve the formula for p by dividing both sides by (1+r)^t to get
P=A/(1+r)^t
P=500,000÷(1+0.06)^(11)
P=263,393.76

he should deposit 263393.76 now to attain 500000

Hope it helps!
ogorwyne

Mr Smith has to deposit $263393.56 now to attain his goal

In order to solve this question we have to use this formula

Amount(1+r)^t = P

where the amount is unknown

rate r = 6 percent

P = principal = 500000

time t = 11 years

We put these values into the formula

Amount(1+0.06)¹¹ = 500000

1.8983amount = 500000

divide through by 1.8983 to get the amount

Amount = 500000/1.8983

= $263393.56

Therefore Mr Smith has to deposit $263393.56 now to attain his goal

Read more on https://brainly.com/question/16976783?referrer=searchResults

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