a. The formula is: Principal = Total ÷ (1 + Rate)<span>^years </span>Principal = 2,000 / (1.028)^3 Principal = 2,000 /
<span>
<span>
<span>
1.086373952
</span>
</span>
</span>
Principal =
<span>
<span>
<span>
1,840.99</span></span></span>
b. Total = Principal × (1 + Rate)^years Total = <span>1,840.99 * (1.028)^5 </span>Total =
1,840.99 * <span>
<span>
<span>
1.1480626105
</span>
</span>
</span>
<span>Total =
2,113.57</span> (1,840.99 becomes <span>2,113.57 in five years at 1.028% interest.)
</span>You will find this calculator helpful: http://www.1728.org/compint.htm as well as these formulas: http://www.1728.org/compint2.htm
