Question

Michelle needs to save $7,000 for school in the next two years. She found a bank that offers a 9% interest rate compounded annually. What does she need to deposit at the beginning of the year to have enough money for school?

Answer 1

`100\%+9\%=109\%=1.09\\\\x*1.09^2=7,000\\\\1.1881x=7,000\ \ \ \ /:1.1881\\\\x\approx5892\\\\Answer:\$5892`