Question

The future value of an investment is 10,110.28 if money was originally invested at 3.5% compounded semi annually for 5 years what was the amount of the original investment

Answer 1

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Actually Welcome to the Concept of the Compound Interest.

Since we know that formula for the Compound interest is :-

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

here, A = total amount received at end, P= initial amount invested, r= rate of interest in decimal, t= time of years and n= frequency per year, so we get as,

=>10110.28 = P(1+0.035/2)^2*5

=>10110.28 = P (1+0.0175)^10

=>10110.28= P(1.0175)^10

=>so finally we get as

=>P= 1011.28/1.1894

=> P= 8500