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Math Help - log application problem

  1. #1
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    log application problem

    a couple wants to have $40,000 in 5 years for a down payment on a new house.

    a) how much could they deposit today, at 6.4% compounded quarterly, to have the required amount in 5 years?

    b)how much interest will be earned?

    c)if they can deposit only $20,000 now, how much more will they need to complete the $40,000 after 5 years?
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  2. #2
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    Quote Originally Posted by shannon1111 View Post
    a couple wants to have $40,000 in 5 years for a down payment on a new house.

    a) how much could they deposit today, at 6.4% compounded quarterly, to have the required amount in 5 years?

    b)how much interest will be earned?

    c)if they can deposit only $20,000 now, how much more will they need to complete the $40,000 after 5 years?
    part (a) ...

    A = A_0\left(1 + \frac{r}{n}\right)^{nt}

    40000 = A_0\left(1 + \frac{.064}{4}\right)^{20}

    A_0 = \frac{40000}{\left(1 + \frac{.064}{4}\right)^{20}}

    A_0 \approx 29120 \, dollars

    you do the rest.
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  3. #3
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    Quote Originally Posted by skeeter View Post
    part (a) ...

    A = A_0\left(1 + \frac{r}{n}\right)^{nt}

    40000 = A_0\left(1 + \frac{.064}{4}\right)^{20}

    A_0 = \frac{40000}{\left(1 + \frac{.064}{4}\right)^{20}}

    A_0 \approx 29120 \, dollars

    you do the rest.
    I figure out the question b ,but I can go on to question c.....

    can someone help me about the part c?plz!!~ thanks
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  4. #4
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    Quote Originally Posted by shannon1111 View Post
    I figure out the question b ,but I can go on to question c.....

    can someone help me about the part c?plz!!~ thanks
    (c) ...

    40000 - 20000\left(1+\frac{.064}{4}\right)^{20}
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  5. #5
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    thanks!~
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