Answer:
$6,079.58 does she need to put in the bank now
Step-by-step explanation:
Using the formula:
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where
A is the amount
P is the principal
r is the rate of interest(in decimal) and
t is the time in years.
As per the statement:
Rita promises to give her 12-year-old daughter $12,000 when she turns 18.
⇒\(A = \$12,000\)
We have to find the sum of amount she need to put in the bank now.
r = 12% = 0.12
t = years.
Substitute these in [1] to solve for P:
\(12000 = P(1+0.12)^6\)
⇒\(12000=P(1.12)^6\)
⇒\(12000 = P(1.97382269)\)
Divide both sides by 1.97382269 we get;
$6,079.57344 =P
Therefore, $6,079.58 does she need to put in the bank now if the interest rate is 12 percent per yea
