Question

jasmime wants to earn 2,000 in simple imterest through a bank account earning 5% annually . how ,uch principal would she need to invest in the account to meet her interest goal in 4 years

Answer 1

To reach the goal, the initial investment should be of: $1,645.40

Step-by-step explanation:

Giving the following information:

Jasmine wants to earn 2,000 in simple interest through a bank account earning 5% annually.

To calculate the initial investment, we need to use a variation of the simple interest future value formula:

FV= PV*(1+i)^n

PV= present value

Isolating PV:

PV= FV/(1+i)^n

PV= 2,000/(1.05^4)= 1,645.40