Dalvin is going to invest in an account paying an interest rate of 3.1% compounded annually. How much would Dalvin need to invest, to the nearest dollar, for the value of the account to reach 1,620 in 20 years?

Lösung

D a l v in i s g o in g t o in v es t in an a cco u n t p a y in g an in t eres t r a t e o f 3.1% co m p o u n d e d ann u a ll y . Ho w m u c h w o u l d D a l v in n ee d t o in v es t, t o t h e n e a res t d o ll a r, f or t h e v a l u e o f t h e a cco u n t t o re a c h 1, 620 in 20 ye a rs ?

Principal : 879.71

Schritte zur Lösung

Translate the problem into an equation:

1620 = P (1 + \frac{0.031}{1})^{1 \cdot 20}

Löse nach

P, 1620 = P (1 + \frac{0.031}{1})^{1 \cdot 20} : P = 879.71

Principal : 879.71