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3 May, 17:53

jasmime wants to earn 2,000 in simple imterest through a bank account earning 5% annually. how, uch principal would she need to invest in the account to meet her interest goal in 4 years

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  1. 3 May, 18:18
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    To reach the goal, the initial investment should be of: $1,645.40

    Explanation:

    Giving the following information:

    Jasmine wants to earn 2,000 in simple interest through a bank account earning 5% annually.

    To calculate the initial investment, we need to use a variation of the simple interest future value formula:

    FV = PV * (1+i) ^n

    PV = present value

    Isolating PV:

    PV = FV / (1+i) ^n

    PV = 2,000 / (1.05^4) = 1,645.40
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