00:01
When you see that phrase compounded monthly, that's your clue that n is going to equal 12.
00:10
And what's interesting about this problem, the other piece i was going to say about monthly is that you're typically using this formula, 1 plus r over n to the nt power, except now they're asking you what to initially put into the account.
00:27
Well, this is a multiplication problem, so to me it makes sense to solve it.
00:31
Multiplication problem by dividing r over n to the n t power.
00:37
So as i jump to the correct answer, i'm going to have to copy this down.
00:43
They tell you that you want to end with $21 ,154, a really weird amount, and three cents.
00:55
We also know that from the formula that one, and we know that the end values in the equation are 12 based off of what i've already done.
01:05
Now, instead of writing n equals 12 right here, i'm going to consider that they also want it in four years from now.
01:12
So t equals 4.
01:14
So when i look at n is 12 and t is 4, i'm going to put 48 here.
01:19
And the reason i like to do that is a lot of my students don't know how to use their calculator...