Question

Wyatt Opend a savings account 4 years ago. the account earns 4%interest compounded quarterly. if the current balance is $1,000.00, how much did he deposit initially

Answer 1

We will use the formula:

A = p( 1+ r/n)^nt

where

A= amount

P = principal

n=number of time interest is compounded per unit time

T= time(years)

r i= interest rate (decimal)

From the question:

A=$ 1000000

P = ?

t = 4

r = 0.04

n= 4

we will go ahead and substitute into the formula and then solve for p

$1000\text{ 000 =P(1 +}\frac{0.04}{4})^{4\times4}$

$1000000=P(1+0.01)^{16}$

$1000000=P(1.01)^{16}$

852, 821.26 = P

The initial amount deposited initially is $852 821.26