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Nathaniel is going to invest in an account paying an interest rate of 3.1% compounded quarterly. How much would Nathaniel need to invest, to the nearest ten dollars, for the value of the account to reach 5,700 in 17 years?

Solution

Nathaniel is going to invest in an account paying an interest rate of 3.1% compounded quarterly. How much would Nathaniel need to invest, to the nearest ten dollars, for the value of the account to reach 5, 700 in 17 years?

Solution

Principal : 3371.97

Solution steps

Translate the problem into an equation:

5700 = P (1 + \frac{0.031}{4})^{4 \cdot 17}

Solve for

P, 5700 = P (1 + \frac{0.031}{4})^{4 \cdot 17} : P = 3371.97

Principal : 3371.97

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