9514 1404 393
Answer:
$275,098.25
Step-by-step explanation:
The principal amount can be found using the annuity formula.
A = P(r/12)/(1 - (1 +r/12)^(-12t))
where A is the monthly payment, P is the principal amount, r is the annual interest rate, and t is the number of years.
Solving for P, we have ...
P = A(12/r)(1 -(1 +r/12)^(-12t)) = 1200(12/0.025)(1 -(1 +.025/12)^(-12·26))
= $275,098.25
The account balance needs to be $275,098.25.
