Question

Julie invests money in an account that pays compound intrestof 5% per annum after 3 years julie has 2778.30 how much did julie initially invest

Answer 1

`\huge\boxed{2400}`

Useful Information:

The formula for compound interest is:
`initial.amount*interest.rate^(no.years)`

Explanation:

To work this out, you would first have to convert the percentage into a decimal. You can do this by dividing the percentage of 5% by 100, which gives you 0.05. This is because percentages are out of 100.

The next step is to add 1 to 0.05, this gives you 1.05. This is because you are working out the percentage increase.

The next step is to substitute the values into the formula. This gives you
`initial.amount*1.05^(3)=2778.30`

To work out the initial value, you would divide the final amount of 2778.30 by
`1.05^3`, which gives you 2400. This is because you are rearranging the formula to find the initial investment.

1) Divide 5 by 100.

`(5)/(100)=0.05`

2) Add 1 to 0.05.

`1+0.05=1.05`

3) Substitute the values into the formula.

`initial.amount*1.05^(3)=2778.30`

4) Divide 2778.30 by
`1.05^3`.

`(2778.30)/(1.05^3)=2400`