Kennedy is going to invest in an account paying an interest rate of 4% compounded quarterly. How much would Kennedy need to invest, to the nearest dollar, for the value of the account to reach 2,800 in 10 years?

Solution

Kennedy is going to invest in an account paying an interest rate of 4% compounded quarterly. How much would Kennedy need to invest, to the nearest dollar, for the value of the account to reach 2, 800 in 10 years?

Solution

Principal : 1880.63

Solution steps

Translate the problem into an equation:

2800 = P (1 + \frac{0.04}{4})^{4 \cdot 10}

Solve for

P, 2800 = P (1 + \frac{0.04}{4})^{4 \cdot 10} : P = 1880.63

Principal : 1880.63

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