Answer:
[tex]\$583,141.09[/tex]
Step-by-step explanation:
The compound interest formula is equal to
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]
where
A is the Final Investment Value
P is the Principal amount of money to be invested
r is the rate of interest in decimal
t is Number of Time Periods
n is the number of times interest is compounded per year
in this problem we have
[tex]t=18\ years\\ A=\$1,000,000.00\\ r=3\%=3/100=0.03\\n=12[/tex]
substitute in the formula above
[tex]1,000,000=P(1+\frac{0.03}{12})^{12*18}[/tex]
Solve for P
[tex]1,000,000=P(1.0025)^{216}[/tex]
[tex]P=1,000,000/(1.0025)^{216}[/tex]
[tex]P=\$583,141.09[/tex]
