Question

Julie invests money in an account that pays compound intrestof 5% per annum after 3 years julie has 2778.30 how much did julie initially invest

Answer 1

Answer:

$\huge\boxed{2400}$

Useful Information:

The formula for compound interest is: $initial.amount*interest.rate^{no.years}$

Step-by-step explanation:

To work this out, you would first have to convert the percentage into a decimal. You can do this by dividing the percentage of 5% by 100, which gives you 0.05. This is because percentages are out of 100.

The next step is to add 1 to 0.05, this gives you 1.05. This is because you are working out the percentage increase.

The next step is to substitute the values into the formula. This gives you$initial.amount*1.05^{3}=2778.30$

To work out the initial value, you would divide the final amount of 2778.30 by $1.05^3$, which gives you 2400. This is because you are rearranging the formula to find the initial investment.

1) Divide 5 by 100.

$\frac{5}{100}=0.05$

2) Add 1 to 0.05.

$1+0.05=1.05$

3) Substitute the values into the formula.

$initial.amount*1.05^{3}=2778.30$

4) Divide 2778.30 by $1.05^3$.

$\frac{2778.30}{1.05^3}=2400$