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#1 2013-05-21 03:29:57

mom
Member
Registered: 2012-04-25
Posts: 94

amount to deposit

How much money would have to be deposited now at 4.5% interest compounded monthly to accumulate to $6500 in 4 years?

Could someone please show me how to work this one? Which formula is it that I use?

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#2 2013-05-21 07:15:55

bobbym
Administrator
From: Bumpkinland
Registered: 2009-04-12
Posts: 81,432

Re: amount to deposit

Hi mom;

I am investing $5431.09


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

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#3 2013-05-22 02:59:12

mom
Member
Registered: 2012-04-25
Posts: 94

Re: amount to deposit

thank you

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#4 2013-05-22 04:19:12

zetafunc.
Guest

Re: amount to deposit

bobbym wrote:

Hi mom;

I am investing $5431.09

How are you getting that? I am getting nowhere near that answer...

#5 2013-05-22 05:30:39

bobbym
Administrator
From: Bumpkinland
Registered: 2009-04-12
Posts: 81,432

Re: amount to deposit

Hi;

What are you getting?


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

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#6 2013-05-22 05:57:00

zetafunc.
Guest

Re: amount to deposit

Approximately $785.84...

785.84*(1.045[sup]48[/sup]) ≈ 6500

#7 2013-05-22 06:00:28

bobbym
Administrator
From: Bumpkinland
Registered: 2009-04-12
Posts: 81,432

Re: amount to deposit

Hi zetafunc;

Isn't that a lot of money earned off of 4.5% interest?

I think the problem is that you have her earning 4.5% per month. She is only earning 1 / 12 of that per month.


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

Offline

#8 2013-05-22 06:05:34

zetafunc.
Guest

Re: amount to deposit

But isn't it being compounded monthly?

It is a lot of interest -- I would have expected that to be per year.

#9 2013-05-22 06:08:25

bobbym
Administrator
From: Bumpkinland
Registered: 2009-04-12
Posts: 81,432

Re: amount to deposit

Hi;

mom wrote:

How much money would have to be deposited now at 4.5% interest compounded monthly to accumulate to $6500 in 4 years?

That means a little bit better than 4.5 % because you get a bit per month.


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

Offline

#10 2013-05-22 06:15:34

zetafunc.
Guest

Re: amount to deposit

So it is actually 4.59% monthly?

#11 2013-05-22 06:24:31

bobbym
Administrator
From: Bumpkinland
Registered: 2009-04-12
Posts: 81,432

Re: amount to deposit

It is 4.5% / 12 monthly. That gives you a higher effective interest than compounding yearly.


In mathematics, you don't understand things. You just get used to them.
I have the result, but I do not yet know how to get it.
All physicists, and a good many quite respectable mathematicians are contemptuous about proof.

Offline

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