Question

how much would need to be deposited into an account earning 5% compounded annually so that the balance will be 100000 in 3 years

Answer 1

Answer:

Principle Amount = 86,383.76

Step-by-step explanation:

Calculation Steps:

First, convert R as a percent to r as a decimal

r = R/100

r = 5/100

r = 0.05 per year,

Then, solve the equation for P

P = A / (1 + r/n) ^ nt

P = 100,000.00 / (1 + 0.05/1) ^ (1)(3)

P = 100,000.00 / (1 + 0.05) ^ (3)

P = 86,383.76

A = Amount

A = AmountP = Principle Amount

A = AmountP = Principle Amountr = rate of intrest

A = AmountP = Principle Amountr = rate of intrest n = Time

^ = Power

Done