Karl Yates needs $24,000 to pay for the remodeling work on his house. A contractor agrees to do the work in 10 months. How much should Karl deposit at 7.4% in order to accumulate the $24,000 by that time?

Let x be the amount we will initially invest. The investment will be made for 10 months while the interest rate given here as 7.4% is the annual interest rate.

So,

24000 = x * ( 1 + 0.074 )^10/12

24000 / ( 1 + 0.074)^10/12 = x

x = $22613.84 rounded off to $22614

Thus if Karl makes an initial investment of $22614 at 7.4% annual interest rate, then he will be able to withdraw a combined Principal + Interest of $24000 after 10 months.

Karl Yates needs ​$24,000 to pay for the remodeling work on his house. A contractor agrees to do the work in 10 months. How much should Karl deposit at 7.4​% in order to accumulate the ​$24,000 by that​ time?

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Karl Yates needs $24,000 to pay for the remodeling work on his house. A contractor agrees to do the work in 10 months. How much should Karl deposit at 7.4% in order to accumulate the $24,000 by that time?