In 3 years, Jayce wants to buy a bicycle that costs 600.00. If he opens a savings account that earns 6% interest compounded monthly, how much will he have to deposit as principal to have enough money in 3 years to buy the bike?

Soluzione

I n 3 ye a rs, J a yce w an t s t o b u y a bi cyc l e t ha t cos t s 600.00. I f h e o p e n s a s a v in g s a cco u n t t ha t e a r n s 6% in t eres t co m p o u n d e d m o n t h l y, h o w m u c h w i ll h e ha v e t o d e p os i t a s p r in c i p a l t o ha v e e n o ug h m o n ey in 3 ye a rs t o b u y t h e bik e ?

Principal : 501.39

Fasi della soluzione

Translate the problem into an equation:

600 = P (1 + \frac{0.06}{12})^{12 \cdot 3}

Risolvi per

P, 600 = P (1 + \frac{0.06}{12})^{12 \cdot 3} : P = 501.39

Principal : 501.39