LaTosha wants $15,000 saved in 5 years to make a down payment on a house. How much money should she invest now at 2.75% compounded monthly in order to meet her goal?

To determine how much money LaTosha should invest now, we can use the formula for compound interest:

\[
A = P \left( 1 + \frac{r}{n} \right)^{nt}
\]

Where:
- $A$ is the future amount ($15,000),
- $P$ is the principal or the amount she should invest now (what we are solving for),
- $r$ is the annual interest rate (2.75% or 0.0275),
- $n$ is the number of times the interest is compounded per year (monthly means $n = 12$),
- $t$ is the number of years (5 years).

Rearranging the formula to solve for $P$:

\[
P = \frac{A}{\left( 1 + \frac{r}{n} \right)^{nt}}
\]

Now we can plug in the values:

\[
P = \frac{15,000}{\left( 1 + \frac{0.0275}{12} \right)^{12 \times 5}}
\]

Let's calculate the result.

Find out how much LaTosha should invest today to save $15,000 in 5 years with a 2.75% interest rate compounded monthly. This detailed solution uses the compound interest formula and is ideal for students in Grades 10-12 studying finance and exponential growth.

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