How much money would you need to deposit today at 9% annual interest compounded monthly to have $12000 in the account after 6 years?
A) 9007 B) 4007 C) 7007.08 D) 8oo7
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Given:
Future Value = $12000
Rate = 9%
Time = 6 years
To Find:
The total money to be deposited
Solution:
As per the question -
FV= 12000, r = 0.09, n = 12, and t = 6.
Using the formula -
FV = P ( 1 + r/n)~nt
Substituting the values -
12000 = P ( 1 + 0.09/12)⁷²
12000 = P ( 1.0075 )⁷²
12000 = P( 1.71255270)
P = 1.71255270/12000
= 7007.08
Answer: The total money to be deposited is $7007.08
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