Question

Michael opened a savings account at an annual interest rate of 5%. At the end of 3 years, the account balance is $4630.50. If Michael did not add any other amounts to this account, how much was his initial deposit?

Answer 1

$4026.52

Explanation:

Given data

rate= 5%

time= 3years

A=$4630.50

P=?

we know that

A=P(1+rt)

$4630.50=P(1+0.05*3)

$4630.50=P(1+0.15)

$4630.50=P(1.15)

P=4630.50/1.15

P=$4026.52

The intitial amount is $4026.52