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Colton is going to invest in an account paying an interest rate of 2.4% compounded annually. How much would Colton need to invest, to the nearest cent, for the value of the account to reach 4,100 in 7 years?

Solution

Colton is going to invest in an account paying an interest rate of 2.4% compounded annually. How much would Colton need to invest, to the nearest cent, for the value of the account to reach 4, 100 in 7 years?

Solution

Principal : 3472.84

Solution steps

Translate the problem into an equation:

4100 = P (1 + \frac{0.024}{1})^{1 \cdot 7}

Solve for

P, 4100 = P (1 + \frac{0.024}{1})^{1 \cdot 7} : P = 3472.84

Principal : 3472.84

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