Isaiah is going to invest in an account paying an interest rate of 4.9% compounded monthly. How much would Isaiah need to invest, to the nearest ten dollars, for the value of the account to reach 1,150 in 14 years?

Solution

Isaiah is going to invest in an account paying an interest rate of 4.9% compounded monthly. How much would Isaiah need to invest, to the nearest ten dollars, for the value of the account to reach 1, 150 in 14 years?

Solution

Principal : 579.93

Solution steps

Translate the problem into an equation:

1150 = P (1 + \frac{0.049}{12})^{12 \cdot 14}

Solve for

P, 1150 = P (1 + \frac{0.049}{12})^{12 \cdot 14} : P = 579.93

Principal : 579.93

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