Question

Fred has a savings account balance of $1,728.57. The interest rate on the account is 3.4% compounded daily. If he opened the account nine years ago, what was the value of his initial deposit? (2 points)

$1,272.91

$1,670.79

$508.40

$1,508.78

Answer 1

we are given

amount is $1,728.57

so,
`A=1728.57`

the account is 3.4% compounded daily

so,

`r=0.034`

`n=365`

If he opened the account nine years ago

so,

`t=9`

Let's assume

initial deposit is P

now, we can use formula

`A=P(1+(r)/(n))^(n*t)`

now, we can plug values

`1728.57=P(1+(0.034)/(365))^(365*9)`

now, we can solve for P

`P(365.034^(3285))/(365^(3285))=1728.57`

`P=(1728.57\cdot \:365^(3285))/(365.034^(3285))`

`P=1272.91`

so,

initial deposit is $1272.91.........Answer