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Ariana is going to invest in an account paying an interest rate of 3.7% compounded monthly. How much would Ariana need to invest, to the nearest dollar, for the value of the account to reach $25,000 in 14 years?

Respuesta :

Answer:

14905

Step-by-step explanation:

Use Calculator. Round to the nearest dollar

The amount of money that Ariana needs to invest today in order to reach $25,000 in 14 years is $14,913.

How much should Ariana invest today?

In order to determine the amount of money that Ariana should invest today, the present value of $25,000 has to be determined.

The formula that can be used to determine the present value is:

P = FV / (1 + r)^nm

Where:

  • FV = Future value
  • P = Present value
  • R = interest rate = 3.7% / 12 = 0.308%
  • m = number of compounding = 12
  • N = number of years

P = 25,000 / (1.00308)^(12 X 14) = $14,913

To learn more about present value, please check: https://brainly.com/question/18760477

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