word problems, any help with solving it please.......Thank you

[faris]

I would like to have $50,000 after retirement in 20 years 8 months from now. How much should I invest right now to reach my goal if interest rate remains the same for the next 30 years as 3% p.a.?

 

[skeeter]

I would like to have $50,000 after retirement in 20 years 8 months from now. How much should I invest right now to reach my goal if interest rate remains the same for the next 30 years as 3% p.a.?

Any information on the period of compounding, i.e. monthly, quarterly, semi-annually, annually?

 

[nasi112]

[MATH]50,000 = x(1 + \frac{0.03}{12})^{248}[/MATH]
Assuming you will compound monthly

but since the problem did not say anything about the type of compounding, it is most likely to be annually.

if that is the case, then the equation will be

[MATH]50,000 = x(1 + 0.03)^{\frac{62}{3}}[/MATH]
find [MATH]x[/MATH], it is the money that you will invest right now

 

[lookagain]

but since the problem did not say anything about the type of compounding, it is most likely to be annually.

At the end of the problem is "p.a." In finance that means "per annum." It is annually.

 

[skeeter]

At the end of the problem is "p.a." In finance that means "per annum." It is annually.

it’s possible the 3% annual rate could be compounded monthly [MATH]\implies \frac{3 \text{%}}{12} = 0.25\text{%}[/MATH] each month