Brianna is going to invest in an account paying an interest rate of 3.9% compounded quarterly. How much would Brianna need to invest, to the nearest hundred dollars, for the value of the account to reach 132,000 in 16 years?

Solution

Brianna is going to invest in an account paying an interest rate of 3.9% compounded quarterly. How much would Brianna need to invest, to the nearest hundred dollars, for the value of the account to reach 132, 000 in 16 years?

Solution

Principal : 70939.28

Solution steps

Translate the problem into an equation:

132000 = P (1 + \frac{0.039}{4})^{4 \cdot 16}

Solve for

P, 132000 = P (1 + \frac{0.039}{4})^{4 \cdot 16} : P = 70939.28

Principal : 70939.28

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