Andrew is going to invest in an account paying an interest rate of 2.2% compounded quarterly. How much would Andrew need to invest, to the nearest hundred dollars, for the value of the account to reach 93,000 in 19 years?

Solution

Andrew is going to invest in an account paying an interest rate of 2.2% compounded quarterly. How much would Andrew need to invest, to the nearest hundred dollars, for the value of the account to reach 93, 000 in 19 years?

Solution

Principal : 61297.85

Solution steps

Translate the problem into an equation:

93000 = P (1 + \frac{0.022}{4})^{4 \cdot 19}

Solve for

P, 93000 = P (1 + \frac{0.022}{4})^{4 \cdot 19} : P = 61297.85

Principal : 61297.85

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