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

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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