Yusuf is going to invest in an account paying an interest rate of 6.5% compounded quarterly. How much would Yusuf need to invest, to the nearest ten dollars, for the value of the account to reach 1,330 in 6 years?

Solution

Yusuf is going to invest in an account paying an interest rate of 6.5% compounded quarterly. How much would Yusuf need to invest, to the nearest ten dollars, for the value of the account to reach 1, 330 in 6 years?

Solution

Principal : 903.31

Solution steps

Translate the problem into an equation:

1330 = P (1 + \frac{0.065}{4})^{4 \cdot 6}

Solve for

P, 1330 = P (1 + \frac{0.065}{4})^{4 \cdot 6} : P = 903.31

Principal : 903.31

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