Question

Maria has decided to invest to help with her retirement savings. How much would she have to invest to have $113,400 after 20 years, assuming an interest rate of 3.57% compounded annually?

Do not round any intermediate computations, and round your final answer to the nearest dollar.

Answer 1

$56,226

Explanation:

x = investment

Earning interest of 3.57% is the equivalent of multiplying the initial balance (investment) by 1.0357;

Over 20 years, the new balance can be found by multiplying the initial balance by (1.0357)²⁰;

We can formulate an equation to solve to get the initial investment:

x(1.0357)²⁰ = 113400

(2.01687752)x = 113400

x = ¹¹³⁴⁰⁰/₍₂.₀₁₆...₎

x = 56225.5263 → 56226