Answer: The investment that should be made is $14612.2
Explanation:
To calculate the principle amount, for the interest compounded monthly follows:
[tex]A=P(1+\frac{R}{n})^{nT}[/tex]
A = Amount after time period 'T' = $25,000
P = Principal amount = ?
R = rate of interest = 2.15 % = 0.0215
n = Number of times interest applied per time period = 12 ( 1 year = 12 months)
T = time period = 25 years
Putting values in above equation, we get:
[tex]25,000=P(1+\frac{0.0215}{12})^{12\times 25}\\\\P=\$14612.2[/tex]
Hence, the investment that should be made is $14612.2
