Moxie wants to have $5000. how much money does she have to deposit in an account at 6% interest, compounded 3 times per year, in order to have $5000 at the end of 6 years? The formula for compound interest AMOUNT is
A = P (1 + r/n)^(nt),
where P is the principal and must be calculated here; A is the amount Moxie wants to have after 6 years, and is $5000; r is the annual interest rate, expressed as a decimal fraction: 0.06; n is the number of compounding periods per year, which here is 3; and t is the time, in years, here equal to 6.
Solve the following for P: $5000 = P (1 + 0.06/3)^(3*6)
Hint: $5000 = P (1.02)^18
