Question

How much principle, to the nearest dollar, should you invest at 4 percent in order to have $3000 for a vacation to Europe in 3 years

Answer 1

Answer:

Principle should be $2,667

Step-by-step explanation:

We need $3000 for a vacation to Europe in 3 years.

Using amount formula,

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

Where, P is principle (P=?)

A is amount (A=3000)

r is rate of interest (r=0.04)

t is time (t=3)

Substitute the values into formula and solve for P

$3000=P(1+0.04)^3$

$3000=P(1.04)^3$

$P=\frac{3000}{1.04^3}$

$P=2666.98$

$P\approx \ 2667$

Hence, Principle should be $2,667