Question

A company will need ​$50 comma 000 in 7 years for a new addition. To meet this​ goal, the company deposits money in an account today that pays 3​% interest compounded annually. Find the amount to the nearest hundred dollars that should be invested to total ​$50 comma 000 in 7 years.

Answer 1

The amount to the nearest hundred dollars to be invested is $40,700

Step-by-step explanation:

The formula to apply here is the compound interest formula;

$A=P(1+\frac{r}{n} )^{nt}$

where

A=amount account at the end ofthe period=$50,000

P=The initial amount to invest=?

r=the rate of interest=3%

n=the number of compounding per year=1

t=time the money is invested=7

Apply the formula;

$50,000=p(1+\frac{0.03}{1} )^{1*7} \\\\\\50,000=p(1.03)^{7} \\\\\\50,000=1.2299p\\\\\\50,000/1.2299=p\\\\40653.71\\\\\\40,700$

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