Question

Mr. Jimenez deposited money into an account in which interest is compounded quarterly at a rate of 2.6%.

How much did he deposit if the total amount in his account after 4 years was $7160.06, and he made no other deposits or withdrawals?

Formula Is : A = P ( 1 + r/n ) ^ n * t

Answer Choices:

a. $6455

b. $6798

c. $6887

d. $6977

Answer 1

The answer is A.

A is the amount after t years, P is the amount originally deposited, r is the interest rate, and n is how often the interest is compounded per t.

Plug in what we know and solve for P:


`7160.06=P(1+ (0.026)/(4))^((4)(4))`

P =
`(7160.06)/((1+ (0.026)/(4) )^(16)) = 6454.999`

Answer 2

Option a.
`\$6,455`

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=4\ years\\ A=\$7,160.06\\ r=0.026\\n=4`

substitute in the formula above and solve for P

`7,160.06=P(1+(0.026)/(4))^(4*4)`

`7,160.06=P(1+(0.026)/(4))^(4*4)`

`P=7,160.06/1.109227=\$6,455`