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Abdoulaye is going to invest in an account paying an interest rate of 5.1% compounded quarterly. How much would Abdoulaye need to invest, to the nearest cent, for the value of the account to reach 138,000 in 14 years?

Solution

Abdoulaye is going to invest in an account paying an interest rate of 5.1% compounded quarterly. How much would Abdoulaye need to invest, to the nearest cent, for the value of the account to reach 138, 000 in 14 years?

Solution

Principal : 67881.74

Solution steps

Translate the problem into an equation:

138000 = P (1 + \frac{0.051}{4})^{4 \cdot 14}

Solve for

P, 138000 = P (1 + \frac{0.051}{4})^{4 \cdot 14} : P = 67881.74

Principal : 67881.74

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