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Omar is going to invest in an account paying an interest rate of 6% compounded monthly. How much would Omar need to invest to the nearest dollar for the value of the account to reach 32400 in 20 years?

Solution

Solution

Principal : 9787.91

Solution steps

Translate the problem into an equation:

32400 = P (1 + \frac{0.06}{12})^{12 \cdot 20}

Solve for

P, 32400 = P (1 + \frac{0.06}{12})^{12 \cdot 20} : P = 9787.91

Principal : 9787.91

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