Eric invests an amount in a bank that pays compound interest at a rate of 2.16% per year.At the end of 5 years, the value of his investment is $6999.31.Calculate the amount Eric invests.
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Given : Eric invests an amount in a bank that pays compound interest at a rate of 2.16% per year.
At the end of 5 years, the value of his investment is $6999.31.
To Find : Calculate the amount Eric invests.
Solution:
Let say the amount Eric invests = P $
Rate of interest = 2.16 % per year
Time n = 5 years
Amount A = $6999.31
A = P(1 + R/100)ⁿ
=> 6999.31 = P (1 + 2.16/100)⁵
=> P = 6290
Hence amount of investment = $ 6290
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