Initial Investment

Read the following instructions in order to complete this discussion, and review the example of how to complete the math required for this assignment:
Your initial post should be 150250 words in length. Respond to at least two of your classmates’ posts by Day 7 in at least a paragraph. Do you agree with how they used the vocabulary? Do their answers make sense?
Carefully review the Grading Rubric for the criteria that will be used to evaluate your discussion.
In Section 4.1, we studied the amount formula A = P(1 + r)n. If we are interested in the principal P that must be invested today to grow to a specified amount A in the future, then the principal is called the present value of the investment. We can find a formula for present value by solving the amount formula for P:
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The Present Value Formula
In Section 4.1, we studied the amount formula A = P(1 + r)n. If we are interested in the principal P that must be invested today to grow to a specified amount A in the future, then the principal is called the present value of the investment. We can find a formula for present value by solving the amount formula for P:
Page 270
The Present Value Formula
In Section 4.1, we studied the amount formula A = P(1 + r)^{n}. If we are interested in the principal P that must be invested today to grow to a specified amount A in the future, then the principal is called the present value of the investment. We can find a formula for present value by solving the amount formula for P:
The present value P that will amount to A dollars after n years with interest compounded annually at annual interest rate r is given by the formula
A new parent wants to have $20,000 in his child’s college fund when his infant is ready for college in 18 years. How much must he invest now at 8% compounded annually to achieve this goal?
An investment today of $5004.98 will amount to $20,000 in 18 years.