Question

Susan has an investment account which compounds interest annually at a rate of 3.2%. After 6 years, she has 86125 in the

account. How much money did she initially place in the account? Round your answer to the nearest whole number. Do not
include a s in your answer.
Provide your answer below:

Answer 1

To find out how much money Susan initially placed in the account, use the formula for compound interest.

Step-by-step explanation:

To find out how much money Susan initially placed in the account, we need to use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (initial amount), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Given that Susan has $86,125 after 6 years and the interest is compounded annually at a rate of 3.2%, we can plug in the values into the formula:

$86,125 = P(1 + 0.032/1)^(1*6)

$86,125 = P(1.032)^6

Dividing both sides by (1.032)^6 gives:

P = $83,000.01

Therefore, Susan initially placed approximately $83,000 in the account.