William is going to invest in an account paying an interest rate of 5.5% compounded monthly. How much would William need to invest, to the nearest hundred dollars, for the value of the account to reach 980 in 7 years?

Solución

Wi ll iam i s g o in g t o in v es t in an a cco u n t p a y in g an in t eres t r a t e o f 5.5% co m p o u n d e d m o n t h l y . Ho w m u c h w o u l d Wi ll iam n ee d t o in v es t, t o t h e n e a res t h u n d re d d o ll a rs, f or t h e v a l u e o f t h e a cco u n t t o re a c h 980 in 7 ye a rs ?

Principal : 667.43

Pasos de solución

Translate the problem into an equation:

980 = P (1 + \frac{0.055}{12})^{12 \cdot 7}

Resolver para

P, 980 = P (1 + \frac{0.055}{12})^{12 \cdot 7} : P = 667.43

Principal : 667.43