Tristan is going to invest in an account paying an interest rate of 6.2% compounded monthly. How much would Tristan need to invest, to the nearest cent, for the value of the account to reach 18,100 in 12 years?

Solution

Tristan is going to invest in an account paying an interest rate of 6.2% compounded monthly. How much would Tristan need to invest, to the nearest cent, for the value of the account to reach 18, 100 in 12 years?

Solution

Principal : 8617.78

Solution steps

Translate the problem into an equation:

18100 = P (1 + \frac{0.062}{12})^{12 \cdot 12}

Solve for

P, 18100 = P (1 + \frac{0.062}{12})^{12 \cdot 12} : P = 8617.78

Principal : 8617.78

Popular Examples

184 of what number is 36 Terrell is saving up money to buy a car. Terrell puts 6,977.00 into an account which earns 7.29% interest, compounded monthly. How much will he have in the account after 9 years?A person invests 2000 dollars, which increases in value by 7% per year for three years.Calculate the value of the investment after three years.Stanley opened a savings account and deposited 7,000.00 as principal. The account earns 7% interest, compounded quarterly. How much interest will he earn after 5 years?The sum of 4 consecutive odd numbers is 56 . Find the greatest of the 4 numbers.