## General Question

# How to figure out this compounding interest word problem?

Asked by Metadata (37
)
3 months ago

Can someone help me with this word problem?

Uncle Al wants to open an account for his nieces and nephews that he hopes will have $100,000 in it after 25 years. How much should he deposit now into an account that yields 1.75% interest compounded monthly so he can be assured of meeting that goal amount?

The answer is $64,585.43, but I don’t understand how they arrived at this answer. I know the formula for Present Value and Future Value, but I don’t get the same answer. Thanks in advance for your help.

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