sally wants $7,650 in 2 years using an interest rate of 12% compounded monthly, How much does she need to invest today for this to happen?

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sally wants $7,650 in 2 years using an interest rate of 12% compounded monthly, How much does she need to invest today for this to happen?

Mathematics
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At vero eos et accusamus et iusto odio dignissimos ducimus qui blanditiis praesentium voluptatum deleniti atque corrupti quos dolores et quas molestias excepturi sint occaecati cupiditate non provident, similique sunt in culpa qui officia deserunt mollitia animi, id est laborum et dolorum fuga. Et harum quidem rerum facilis est et expedita distinctio. Nam libero tempore, cum soluta nobis est eligendi optio cumque nihil impedit quo minus id quod maxime placeat facere possimus, omnis voluptas assumenda est, omnis dolor repellendus. Itaque earum rerum hic tenetur a sapiente delectus, ut aut reiciendis voluptatibus maiores alias consequatur aut perferendis doloribus asperiores repellat.

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You will need to use this formula where A is final amount (7,650), P is principle amount (what you are solving for), r is annual interest rate (0.12), n is the number of times the interest is compounded yearly (12, since there are 12 months in a year), and t is number of years (2 years): \[ A=P (1 + r/n)^T\] where T=n*t. So solving for P, we have P= A/((1+r/n)^(n*t)) =7650/((1+.12/12)^(12*2)) =6,024.88 So Sally will need to invest $6,024.88 today. Does this make sense? The original formula should help you if you have problems similar to this one.

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