Question

Jimmy invests a sum of money in a savings account with a fixed annual interest rate of 3% compounded 10 times per year. After 10 years, the balance reaches

$5,329. What was the amount of initial investment?

Answer 1

The amount of initial investment was $3,949.60.

Explanation:

Since Jimmy invests a sum of money in a savings account with a fixed annual interest rate of 3% compounded 10 times per year, and after 10 years, the balance reaches $ 5,329, to determine what was the amount of initial investment, the following calculation has to be done:

X x (1 + 0.03 / 10) ^ 10x10 = 5,329

X x 1.003 ^ 100 = 5,329

X x 1.3492 = 5,329

X = 5,329 / 1.3492

X = 3,949.60

Therefore, the amount of initial investment was $3,949.60.