Kevin is going to invest in an account paying an interest rate of 2% compounded monthly. How much would Kevin need to invest, to the nearest hundred dollars, for the value of the account to reach 84,000 in 10 years?

Solution

Kevin is going to invest in an account paying an interest rate of 2% compounded monthly. How much would Kevin need to invest, to the nearest hundred dollars, for the value of the account to reach 84, 000 in 10 years?

Solution

Principal : 68784.83

Solution steps

Translate the problem into an equation:

84000 = P (1 + \frac{0.02}{12})^{12 \cdot 10}

Solve for

P, 84000 = P (1 + \frac{0.02}{12})^{12 \cdot 10} : P = 68784.83

Principal : 68784.83

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