Question

Uta invests an amount into a compound interest investment account that pays 6% a year. After six years she withdraws her total balance of $500. Using the formula A=p(1+r)t how much money did Uta initially invest?

Answer 1

C- $352.48

Explanation:

Just took test :]

Answer 2

Uta initially invest $353, if she withdraws $500 after six years with compound interest of 6% a year.

Explanation:

The given is,

After six years she withdraws her total balance of $500

Interest rate 6 % a year ( compounded )

Step:1

Formula to calculate the future amount with an compound interest rate,

`F=P(1+r)^(t)`.............................(1)

Where, F - Future worth amount

P - Initial investment

r - Rate of interest

t - No. of years

Step:2

From the given,

F = $500

r = 6%

t = 6 years

Equation (1) becomes,

`500 = P(1+0.06)^(6)`

=
`P(1.06)^(6)`

= P (1.41852)

`P= (500)/(1.41852)`

= 352.48

≅ 353

P = $353

Result:

Uta initially invest $353, if she withdraws $500 after six years with compound interest of 6% a year.