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 mc020-1.jpg, how much money did Uta initially invest?
$180.00
$320.00
$352.48
$471.70

Answer 1

Answer:

Option C - $352.48    

Step-by-step explanation:

Given : 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.

To find : How much money did Uta initially invest?

Solution :

Using compound interest formula,

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

Where A is the amount   A=500

P is the principle        

r is the rate r=6%=0.06

t is the time t= 6 years

Substitute the value,

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

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

$500=P\times 1.418$

$P=\frac{500}{1.418}$

$P=\ 352.48$

Therefore, Option C - Uta initially invest $352.48

Answer 2

P=500÷(1+0.06)^(6)
P=352.48