Question

the shopkeeper received an interest of $6159 from an investment that offers compound interest at 3.5% p.a. after 10 years. What is the initial investment amount? correct your answer to the nearest dollar.

Answer 1

Amount invested = $15,000 (Approx.)

Explanation:

Given:

Amount of interest received = $6,159

Rate of interest = 3.5%

Number of year = 10 year

Find;

Amount invested

Computation:

Using compound interest formula

I = P[(1+r)ⁿ - 1]

6,159 = Amount invested[(1+3.5%)¹⁰ - 1]

6,159 = Amount invested[(1+0.035)¹⁰ - 1]

6,159 = Amount invested[(1.035)¹⁰ - 1]

Amount invested = $15,000 (Approx.)