Question

Sebastian deposited money into an account in which interest is compounded monthly at a rate of 2.3%

How much did he deposit if the total amount in his account after 5 years was $2123.47

Answer 1

1,895.95

Explanation:

Gather info

2.3% compounded annually for 5 yrs for 2123.47

Write formula

A=P(1+Rate)^t

Substitute info

2123.47=P(1+.023)^5

Add rate

2123.47=P(1.023)^5

Solve 1.023^5

2123.47=P1.12

Divide both sides by 1.12

1,895.95=P

Enjoy!