Answer: Abdol needs to invest $6121.1
Step-by-step explanation:
We would apply the formula for determining compound interest which is expressed as
A = P(1 + r/n)^nt
Where
A = total amount in the account at the end of t years
r represents the interest rate.
n represents the periodic interval at which it was compounded.
P represents the principal or initial amount deposited
From the information given,
A = $8000
r = 5% = 5.5/100 = 0.055
n = 1 because it was compounded once in a year.
t = 5 years
Therefore,
8000 = P(1 + 0.055/1)^1 × 5
8000 = P(1 + 0.055)^5
8000 = P(1.055)^5
8000 = 1.30696P
P = 8000/1.30696
P = $6121.1
