Find the principal that must be invested at the rate 8%,compounded monthly,so that $3,000,000 will be available for retirement in 50 years.Round your answer to the nearest cent.
A)$750,000.00
B)$55,681.16
C)$2,151,973.12
D)$1,000,000.00
E)$63,963.69

Question

Find the principal that must be invested at the rate 8%,compounded monthly,so that $3,000,000 will be available for retirement in 50 years.Round your answer to the nearest cent. ​
A)$750,000.00
B)$55,681.16
C)$2,151,973.12
D)$1,000,000.00
E)$63,963.69

Quizplus · Accepted Answer

The formula for compound interest is A = P(1 + r/n)^(nt), where A is the future value, P is the principal, r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years. In this case, we have A = $3,000,000, r = 8%, n = 12 (since the interest is compounded monthly), and t = 50. Substituting these values into the formula, we get:$3,000,000 = P(1 + 0.08/12)^(12*50)$3,000,000 = P(1.006667)^600$3,000,000 = P(22.0807)P = $3,000,000/22.0807P = $135,895.68Therefore, the principal that must be invested is $135,895.68, rounded to the nearest cent.

Find the Principal That Must Be Invested at the Rate