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sineoko [7]
3 years ago
14

Ndiba invests a sum of money in a savings account with a fixed annual interest rate of 4.61% compounded 3 times per year. After

6 years, the balance reaches 5485.85. What was the amount of the initial investment?
Mathematics
1 answer:
belka [17]3 years ago
7 0

Answer:the amount of the initial investment was $4165

Step-by-step explanation:

Let P represent the Initial amount of money invested. This means that the principal is P

It was compounded 3 times in a year. So

n = 3

The rate at which the principal was compounded is 4.61%. So

r = 4.61/100 = 0.0461

It was compounded for 6 years. So

t = 6

The formula for compound interest is

A = P(1+r/n)^nt

A = total amount in the account at the end of t years. After 6 years, the balance reaches $5485.85. It means that

A = 5485.85

Therefore

5485.85 = P(1+0.0461/3)^3 × 6

5485.85 = P(1.0154)^18

P = 5485.85/1.317 = 4165.4

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