Julieta is going to invest in an account paying an interest rate of 4% compounded monthly. How much would Julieta need to invest, to the nearest hundred dollars, for the value of the account to reach 190 in 7 years?

Solution

Solution

Principal : 143.67

Solution steps

Translate the problem into an equation:

190 = P (1 + \frac{0.04}{12})^{12 \cdot 7}

Solve for

P, 190 = P (1 + \frac{0.04}{12})^{12 \cdot 7} : P = 143.67

Principal : 143.67

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