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Popular Word Problems >

how much money should be deposited today in an account that earns 8% compounded annually so that it will accumulate to 11,000 in three years

Solution

h o w m u c h m o n ey s h o u l d b e d e p os i t e d t o d a y in an a cco u n t t ha t e a r n s 8% co m p o u n d e d ann u a ll y so t ha t i t w i ll a cc u m u l a t e t o 11, 000 in t h ree ye a rs

Solution

Principal : 8732.15

Solution steps

Translate the problem into an equation:

11000 = P (1 + \frac{0.08}{1})^{1 \cdot 3}

Solve for

P, 11000 = P (1 + \frac{0.08}{1})^{1 \cdot 3} : P = 8732.15

Principal : 8732.15

Popular Examples

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