Question

Please Help!!!!!!!!!!!!Find the principal amount invested if the amount in a quarterly compounded account with a 2.8% interest rate is $9,111.29 after 42 months

Answer 1

Present value (principal amount), P
Future value, F = 9111.29
n=42/3=14 quarters
compound interest per period, i = 0.028/4 = 0.007
Using compound interest formula,
F=P(1+i)^n
or
9111.29=P(1.007)^14
Solve for P
P=9111.29/(1.007)^14
= 8263.56

Answer: The principal amount is $8263.56 (to the nearest cent)