Answer:
The money that would need to be deposit into the account is $21009.44
Step-by-step explanation:
Given: Interest = 5.75% compounded annually
Amount = $ 85,000
Times period = 25 years
We have to calculate the money that would need to be deposit into the account.
We know the formula for compound interest
\(A=P(1+\frac{r}{100})^n\)
Where, A is amount
P is principal amount
n is time
r = rate of interest
Thus, Substitute, we get,
\(85000=P(1+\frac{5.75}{100})^25\)
Solving for P,
\(\left(1+\frac{5.75}{100}\right)^{25}=4.0458(approx)\)
Divide both side by 4.0458, we get,
\(P=\frac{85000}{4.0458}=21009.44\)
Thus, the money that would need to be deposit into the account is $21009.44
