Xin is going to invest in an account paying an interest rate of 5.8% compounded annually. How much would Xin need to invest, to the nearest hundred dollars, for the value of the account to reach 2,290 in 16 years?

Solution

Xin is going to invest in an account paying an interest rate of 5.8% compounded annually. How much would Xin need to invest, to the nearest hundred dollars, for the value of the account to reach 2, 290 in 16 years?

Solution

Principal : 929.11

Solution steps

Translate the problem into an equation:

2290 = P (1 + \frac{0.058}{1})^{1 \cdot 16}

Solve for

P, 2290 = P (1 + \frac{0.058}{1})^{1 \cdot 16} : P = 929.11

Principal : 929.11

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