Fabian is going to invest in an account paying an interest rate of 5.5% compounded annually. How much would Fabian need to invest, to the nearest ten dollars, for the value of the account to reach 1,240 in 13 years?

Lösung

F abian i s g o in g t o in v es t in an a cco u n t p a y in g an in t eres t r a t e o f 5.5% co m p o u n d e d ann u a ll y . Ho w m u c h w o u l d F abian n ee d t o in v es t, t o t h e n e a res t t e n d o ll a rs, f or t h e v a l u e o f t h e a cco u n t t o re a c h 1, 240 in 13 ye a rs ?

Principal : 618.22

Schritte zur Lösung

Translate the problem into an equation:

1240 = P (1 + \frac{0.055}{1})^{1 \cdot 13}

Löse nach

P, 1240 = P (1 + \frac{0.055}{1})^{1 \cdot 13} : P = 618.22

Principal : 618.22