Answer:
They need to set aside $609.98
Explanation:
The compound interest formula is:
[tex]A=P(1+r)^t[/tex]Where:
• A is the amount after t periods
,• P is the initial amount
,• r is the rate of compound interest of each period
,• t is the amount of periods.
In the problem, we want to know P such that:
• A = $10,000
,• r = 0.06 (6% to decimal, we divide by 100: 6/100 = 0.06)
,• t = 4
Then:
[tex]10000=P(1+0.06)^4[/tex][tex]P=\frac{10000}{1.06^4}[/tex][tex]P=609.98[/tex]