Question

What is the principal that will grow to $5800 in seven years, two months at 5.7% compounded monthly? The principal is 5 (Round to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Answer 1

Solution:

$\small A=\$5800$

$\small r=5.7\%$

$\small n=12$

t = 7 6 = 43 6 years

-?

$\small A=P\left ( 1+\frac{r}{n} \right )^{nt}$

$\small \therefore 5800=P\left ( 1+\frac{0.057}{12} \right )^{\frac{43}{6}\times 12}$

$\small \therefore 5800=P\left ( 1+0.00475 \right )^{86}$

$\small \therefore 5800=P\left ( 1.00475 \right )^{86}$

$\small \therefore 5800=P\times 1.5031048576$

$\small \therefore P=\frac{5800}{1.5031048576}$

$\small \therefore P=3858.68$

$\small \therefore P=\$3858.68$