How Much Cash Must Be Deposited In A Savings Account As A Single Amount In Order To Accumulate $300,000 At The End Of 12 Years, Assuming That The Account Will Earn 10% Interest In First 6 Years And 8% Interest In Last 6 Years?


3 Answers

Larry Patterson Profile
Larry Patterson answered
First off, don't proceed based on this info until it is checked closely.  It can only be considered an estimate at best.

If you can get 10% (big if) and if it is compounded monthly, if you invested
$ 91,570,  it should increase to  $ 300,015  in 12 years ( 144 months).

There are formulas for these calculations but I just based it on some programs I have set up in MS EXCEL.
Ellie Hoe Profile
Ellie Hoe answered
F.v = P(1+I)^n
F.v = 300,000
P = ?
n = 12
I = 10%

Putting the values in the equation you will get
300000= P(1+.10)^12
300000 = P(3.138428376721)
300000/ 3.1384 = P

P = 95589.2453 >>>answer

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