Celesta wants to go on a cruise in three years. She could earn 8.2 percent compounded monthly in an account if she were to deposit the money today. She needs to have $10,000 in three years. How much will she have to deposit today

Given:

Amount after three years = $10000

Rate of interest = 8.2 percent compounded monthly = 0.082

Time = 3 years

To find:

The principal value.

Solution:

Formula for amount is

where, P is principal, r is rate of interest, n is the number of times interest compounded in an year, t is number of years.

Substitute A=10000, r=0.082, n=12 and t=3 in the above formula.

Divide both sides by 1.27783.

Therefore, today she have to deposit $7825.767.

or

step-by-step explanation:

we need to solve for 'x' the following equation:  

we have that:

⇒

⇒ ⇒

factorizing, we get that:

  ⇒

then, the solutions are: or

nothing extraneous has been found!