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Samantha is going to invest in an account paying an interest rate of 6.4% compounded monthly. How much would Samantha need to invest, to the nearest dollar, for the value of the account to reach 2,130 in 12 years?

Solution

Samantha is going to invest in an account paying an interest rate of 6.4% compounded monthly. How much would Samantha need to invest, to the nearest dollar, for the value of the account to reach 2, 130 in 12 years?

Solution

Principal : 990.21

Solution steps

Translate the problem into an equation:

2130 = P (1 + \frac{0.064}{12})^{12 \cdot 12}

Solve for

P, 2130 = P (1 + \frac{0.064}{12})^{12 \cdot 12} : P = 990.21

Principal : 990.21

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