Question

What principle will amount to $4000 if invested at 8.5% compounded quarterly for 5 years?

Answer 1

$2626.75

Explanation:

First, let's set up the equation for this:
`4000 = P(1 + (0.085)/(4))^(4(5))`

Now, we can simply divide
`(4000)/((1+(0.085)/(4))^(20) )`

and we get P ≈ $2626.75