Question

Liz deposited money into an account in which interest is compounded quarterly at a rate of 3.2%. How much did she deposit if the total amount in her account after 5 years was $4837.65, and she made no other deposits or withdraws. SHOW WORK

Answer 1

Answer:

She deposited $4124.998$ dollars

Step-by-step explanation:

Given -

Rate of interest $= 3.2$ %

Rate of interest compounded quarterly

Time period $= 5$ years

Amount after $5$ years $= 4837.65$ dollars

We shall use the following equation for solving this question

$A = P (1 + r)^t$

Where A is the final amount after time period t

P is the principal amount

r is the rate of interest

and t is the time period

Substituting the given values in above equation, we get -

$4837.65 = P (1 +\frac{3.2}{4*100})^{4 *5}\\4837.65 = P (1 +0.008)^{20}\\P = \frac{4837.65}{1.7276} \\P = 4124.998$

She deposited $4124.998$ dollars