Answer:
$39.87
Step-by-step explanation:
To answer this equation we need to use this equation:
[tex]A = P(1 + \frac{r}{n} )^n^t[/tex]
Variable meaning:
A: Amount
P: Initial amount
R: Interest rate (decimal)
N: Number of times interest is compounded per year
T: Time (years)
Given in the question:
A = 300,000
R = .069 (remember that when turning percent to decimal you move the decimal 2 to the left)
N = 12 (because there are 12 months a year)
T = 40 years
Plug into the equation:
[tex]300000 = P(1 + \frac{.069}{12} )^(^1^2^*^4^0^)[/tex]
Solve:
[tex]300,000 = P(1 + .00575)^4^8^0\\300,000 = P(1.00575)^4^8^0\\\frac{300000}{(1.00575)^4^8^0} = P\\P = 19138.22[/tex]
We aren't done yet, that is the total number of money you need to invest to get $300,000.
Take 19138.22 and divide it by 480 (because there are 480 months in 40 years)
Then you will get 39.87
Therefore, if you invest $39.87 every month for 40 years then the investment should total $300,000.
I hope this helps!
If you think anything is wrong with this let me know!
- Kay :)
