Question

Uta invests an amount into a compound interest investment account that pays 6% a year. After six years she withdraws her total balance of $500. Using the formula A=p(1+r)t how much money did Uta initially invest?

Answer 1

Uta initially invest $353, if she withdraws $500 after six years with compound interest of 6% a year.

Step-by-step explanation:

The given is,

                 After six years she withdraws her total balance of $500

                 Interest rate 6 % a year ( compounded )

Step:1

          Formula to calculate the future amount with an compound interest rate,

                                      $F=P(1+r)^{t}$.............................(1)

        Where, F - Future worth amount

                     P - Initial investment

                      r - Rate of interest

                      t - No. of years

Step:2

        From the given,

                   F = $500

                   r = 6%

                   t = 6 years

       Equation (1) becomes,

                           $500 = P(1+0.06)^{6}$

                                  = $P(1.06)^{6}$

                                  = P (1.41852)

                              $P= \frac{500}{1.41852}$

                                  = 352.48

                                  ≅ 353

                              P = $353

Result:

         Uta initially invest $353, if she withdraws $500 after six years with compound interest of 6% a year.

Answer 2

Answer:

C- $352.48

Step-by-step explanation:

Just took test :]