Question

investment is made at r percent compounded annually, at the end of n years it will have grown to A = P(1 + r)n . An investment made at 16% compounded annually. It grows to $1,740 at the end of the year. How much was originally invested?

Answer 1

Answer:

$1,500

Explanation:

Given the compounding formula $A = P(1+r)^{n}$

And given an investment (P), made at 16% compounded annually (r), and an ending amount of $1,740 (A) at the end of the year (n = 1 year), the original amount invested (P) can be computed as follows.

$1,740 = P(1+0.16)^{1}$

$1,740 = P * 1.16$

= P = 1,740/1.16 = 1,500.

Therefore, the original investment was $1,500.