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Popular Word Problems >

Find the principal needed now to get the given amount; that is, find the present value to get 600 after 4 years at 3% compounded quarterly

Solution

F in d t h e p r in c i p a l n ee d e d n o w t o g e t t h e g i v e n ​ am o u n t; t ha t ​ i s, f in d t h e p rese n t v a l u e t o g e t 600 a f t er 4 ye a rs a t 3% co m p o u n d e d q u a r t er l y

Solution

Principal : 532.39

Solution steps

Translate the problem into an equation:

600 = P (1 + \frac{0.03}{4})^{4 \cdot 4}

Solve for

P, 600 = P (1 + \frac{0.03}{4})^{4 \cdot 4} : P = 532.39

Principal : 532.39

Popular Examples

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