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Emma is going to invest in an account paying an interest rate of 5.5% compounded annually. How much would Emma need to invest, to the nearest hundred dollars, for the value of the account to reach 480 in 8 years?

Solution

Solution

Principal : 312.77

Solution steps

Translate the problem into an equation:

480 = P (1 + \frac{0.055}{1})^{1 \cdot 8}

Solve for

P, 480 = P (1 + \frac{0.055}{1})^{1 \cdot 8} : P = 312.77

Principal : 312.77

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