Question

you want to save $5,000 for future family vacation. if the bank pays 4.3% compounded monthly for 3 years, then how much will you need to invest to reach your vacation goal?​

Answer 1

Answer:

The principal amount invested is $4395.93 .

Step-by-step explanation:

Given as :

The Amount that saved for future = A = $5,000

The bank applied rate of interest = r = 4.3% compounded monthly

The time period of loan = t = 3 years

Let the principal amount invested = $p

Now, From monthly Compound Interest method  

Amount = principal × $(1+\dfrac{\textrm rate}{12\times 100})^{12\times time}$

Or, A = p × $(1+\dfrac{\textrm r}{12\times 100})^{12\times t}$

Or, $5000 = p × $(1+\dfrac{\textrm 4.3}{12\times 100})^{12\times 3}$

Or, $5000 = p × $(1.003583)^{36}$

Or, $5000 = p × 1.137414

∴ p = $\dfrac{5000}{1.137414}$

i.e p = $4395.93

So, The principal amount invested = p = $4395.93

Hence, The principal amount invested is $4395.93 . Answer