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If you earn $3500 over 10 years on an investment that pays 5.3% compounded annually what was the principal amount you started with

2 Answers

1 vote
PRT - Principal, Rate , Time formula to solve this I believe. 
User Vadim Caen
by
7.7k points
2 votes

Amount , A= $3500

Time , t= 3 years

rate , r= 5.3% = 0.053

Compounded annually , n= 1

The formula we use here is


A=P(1+(r)/(n))^(nt)

Now let's plug the values


3500=P(1+(0.053)/(1))^(1(10))


3500= P(1.053)^(10)


3500 = P (1.67603742459)

Divide both sides by 1.67603742459

We get

P = $2088.258859

It means started with approx $2088.26

User Sudhansu
by
8.2k points

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