MHB Compounding/Investment Question

  • Thread starter Thread starter eleventhxhour
  • Start date Start date
AI Thread Summary
To determine how much Bob must invest today to reach his goal of $10,000 in five years with a GIC at 6% interest compounded daily, the compound interest formula is applied. The variables include the future value (A) of $10,000, the interest rate (r) of 0.06, the compounding frequency (n) of 365, and the time (t) of 5 years. The missing variable is the present value (P), which can be calculated by rearranging the formula. By solving for P, Bob can find the initial investment required to achieve his goal. This calculation is essential for effective financial planning for his graduation party.
eleventhxhour
Messages
73
Reaction score
0
Bob wants to throw a party when he graduates from high school in five years. He needs $10000. He can invest in a GIC which pays 6% compounded daily. How much must he invest today?
 
Mathematics news on Phys.org
eleventhxhour said:
Bob wants to throw a party when he graduates from high school in five years. He needs $10000. He can invest in a GIC which pays 6% compounded daily. How much must he invest today?

Let's start with the formula for compound interest: $$A=P \left(1+\frac{r}{n} \right)^{nt}$$, where $A$ is the new total amount after calculating interest, $P$ is the amount of money you start with, $r$ is the percent interest (in decimal form), $n$ is the number of times the interest is calculated per year and finally $t$ is the number of years.

Let's start this way. We have all the variables in the equation except for one. What are we missing?
 
Thread 'Video on imaginary numbers and some queries'

Thread 'Video on imaginary numbers and some queries'

Hi, I was watching the following video. I found some points confusing. Could you please help me to understand the gaps? Thanks, in advance! Question 1: Around 4:22, the video says the following. So for those mathematicians, negative numbers didn't exist. You could subtract, that is find the difference between two positive quantities, but you couldn't have a negative answer or negative coefficients. Mathematicians were so averse to negative numbers that there was no single quadratic...
View full post »

Thread 'What Exactly is Dirac’s Delta Function? - Insight'

Insights auto threads is broken atm, so I'm manually creating these for new Insight articles. In Dirac’s Principles of Quantum Mechanics published in 1930 he introduced a “convenient notation” he referred to as a “delta function” which he treated as a continuum analog to the discrete Kronecker delta. The Kronecker delta is simply the indexed components of the identity operator in matrix algebra Source: https://www.physicsforums.com/insights/what-exactly-is-diracs-delta-function/ by...
View full post »
Thread 'Unit Circle Double Angle Derivations'

Thread 'Unit Circle Double Angle Derivations'

Here I made a terrible mistake of assuming this to be an equilateral triangle and set 2sinx=1 => x=pi/6. Although this did derive the double angle formulas it also led into a terrible mess trying to find all the combinations of sides. I must have been tired and just assumed 6x=180 and 2sinx=1. By that time, I was so mindset that I nearly scolded a person for even saying 90-x. I wonder if this is a case of biased observation that seeks to dis credit me like Jesus of Nazareth since in reality...
View full post »

Similar threads

MHB Compound Interest: $50000 Invested for 3 Years at 7.75%
Replies
3
Views
1K
MHB How Much Can a School Earn from a $50000 Donation Invested for 3 Years?
Replies
2
Views
2K
MHB Simple Interest Investment: How Long Will It Take to Grow $550,000 to $720,000?
Replies
1
Views
1K
MHB with Finance Questions - Clarification with Steps
Replies
1
Views
3K
MHB Solve the $5000 Annuity Investment Today
Replies
1
Views
2K
MHB How Much Should Art Invest for an Annuity of 8,000 for Three Years?
Replies
4
Views
3K
I Boas 1.13 Compound interest/geometric series
Replies
1
Views
2K
MHB What is the Exact Amount My Friend Owes Me for Our 50% Partnership Investment?
Replies
3
Views
2K
I Ancient mathematics/History of mathematics
Replies
11
Views
2K
MHB Perpetuity initial step confusion
Replies
1
Views
2K

Hot Threads

Recent Insights

Back
Top