I need $50000 in 12 years. If I earn .25% per month how much do I deposit today?
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I need $50000 in 12 years. If I earn .25% per month how much do I deposit today?
Let's see if we can derive this formula.
The new month's balance would be. The next month would do the same, giving a series of
This reduces to
Now you can solve forand substitute in the values for the original problem (being careful to treat months and percent properly).
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