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if you have 3,500 after 10 years on an investment that pays 3.5% compounded daily, what was the principle amount you started with?

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  1. 9 May, 06:46
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    Answer: $2,466.45

    Step-by-step explanation:

    Hi, to answer this question we have to apply the compounded interest formula:

    A = P (1 + r/n) nt

    Where:

    A = Future value of investment (principal + interest)

    P = Principal Amount

    r = Nominal Interest Rate (decimal form, 3.5/100 = 0.035)

    n = number of compounding periods in each year (365)

    Replacing with the values given

    3,500 = P (1 + 0.035/365) ^365 (10)

    Solving for P

    3,500 = P (1.00009589) ^3650

    3,500 / (1.00009589) ^3650 = P

    P = $2,466.45
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