Tyee is going to invest in an account paying an interest rate of 4.7% compounded monthly. How much would Tyee need to invest, to the nearest dollar, for the value of the account to reach 98,000 in 8 years?

Solution

Tyee is going to invest in an account paying an interest rate of 4.7% compounded monthly. How much would Tyee need to invest, to the nearest dollar, for the value of the account to reach 98, 000 in 8 years?

Solution

Principal : 67336.46

Solution steps

Translate the problem into an equation:

98000 = P (1 + \frac{0.047}{12})^{12 \cdot 8}

Solve for

P, 98000 = P (1 + \frac{0.047}{12})^{12 \cdot 8} : P = 67336.46

Principal : 67336.46

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