How much must you deposit in an account that pays 7% annual interest compounded yearly to have a balance of $550 after 5 years? 550 is not the a in y=a*b^x, 550 is y but I am looking for a. I have 550=a(1.

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Armatita asked Mar 9, 2023

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How much must you deposit in an account that pays 7% annual interest compounded yearly to have a balance of $550 after 5 years?

550 is not the a in y=a*b^x, 550 is y but I am looking for a. I have 550=a(1.07)^5 but what do I do next

Mathematics
high-school

Armatita asked Mar 9, 2023

by Armatita

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1 Answer

14 votes

Answer:

$392 (rounded)

Explanation:

You have this correct:

550 = a(1.07)⁵

The next step:

550 = a*1.4 (rounded)

a = 550/1.4
a = 392 (rounded to the whole number)

Carven answered Mar 14, 2023

by Carven

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