ok this is the question i need help with....it may seem pretty easy but i just plain suck at maths...thanks for any help

 

Robbie is planning a trip overseas and knows that he will need $15,000 to pay for the holiday.

 

a) Robbie can earn 8.05% p.a. calculated monthly

How much does he need to invest now if he wants to be able to pay for

his holiday in 1 1/2 years time??

 

b) How much does he need to invest if he can earn only 4.25% p.a. interest

calculated monthly?

Don't know if you're still around, but here goes. Usually, I ask students to post what they have so far, and where they got stuck (me doing the problem for you doesn't help you at all). So, I'll speak in generalities.

 

Originally posted by poo

Robbie is planning a trip overseas and knows that he will need $15,000 to pay for the holiday.

 

OK

 

a) Robbie can earn 8.05% p.a. calculated monthly

How much does he need to invest now if he wants to be able to pay for

his holiday in 1 1/2 years time??

 

Well, he gets 8.05% on the principal (P) every month, so the relation for the total amount of money (T) at a rate ® and for a time (t) is:

 

T=Prt

 

They ask you for P, and you know everything else.

 

b) How much does he need to invest if he can earn only 4.25% p.a. interest

calculated monthly?

 

Use the same equation. Just change the rate.

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