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Aisha is going to invest in an account paying an interest rate of 2.7% compounded quarterly. How much would Aisha need to invest, to the nearest ten dollars, for the value of the account to reach 6,800 in 16 years?

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Solution

Aisha is going to invest in an account paying an interest rate of 2.7% compounded quarterly. How much would Aisha need to invest, to the nearest ten dollars, for the value of the account to reach 6, 800 in 16 years?

Solution

Principal : 4421.04

Solution steps

Translate the problem into an equation:

6800 = P (1 + \frac{0.027}{4})^{4 \cdot 16}

Solve for

P, 6800 = P (1 + \frac{0.027}{4})^{4 \cdot 16} : P = 4421.04

Principal : 4421.04

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