Find the principle amount that will grow to $25,000 if interest is 3.2% compounded monthly for 3 years?

Question

asked Feb 13, 2021 182k views

1 Answer

Undisp · Answer 1 · 2021-02-19T02:26:37+0000

Answer:

The principal amount is $22.747.95

Explanation:

Given:

Amount = %25000

Time = 3 years

Rate of interest = 3.2%

To Find:

the principal amount = ?

Solution:

The principal amount

P = (A)/((1 + (r)/(n))^(nt))

Where

A is the amount

n is the number of times that interest is compounded per unit t

t is the number of years

r is the rate of interest

On substituting the values

P = (25000)/((1 + ((3.2)/(100))/(1))^(1(3)))

P = (25000)/((1 + (0.032)/(1))^(1(3)))

P = (25000)/((1 + 0.032)^3)

P = (25000)/((1.032)^3)

P = (25000)/(1.099)

$P =\$22.747.95$