Question

Ryan invests a sum of money in a savings account with a fixed annual interest rate of 4. 31.

Answer 1

The amount of his initial investment is $8361

The complete question says:

Ryan invests a sum of money in a savings account with a fixed annual interest rate of 4.31% compounded 12 times per year. After 10 years, the balance reaches $12,855.94. What was the amount of the initial investment?

The initial investment is the amount required to start a particular project,  and the amount of the initial investment can be calculated by using the compound interest formula:

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

where;

• A = amount
• P = Principal
• r = interest rate
• n = number of months

∴

$\mathbf{12855.94 = P(1 + \dfrac{0.0431}{12})^{12 \times 10}}$

$\mathbf{12855.94 = P(1 +0.003591666667)^{120}}$

$\mathbf{12855.94 = P(1.53760)}$

$\mathbf{P= \dfrac{12855.94}{(1.53760)} }$

P = $8361.043

P ≅ $8361

Therefore, we can conclude that the amount of the initial investment is $8361

Learn more about compound interest here:

https://brainly.com/question/14295570?referrer=searchResults