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?

Question

Journey Foster

Mathematics

9 May, 06:38

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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Answers (1)

Know the Answer?

Aliya Levy · Answer 1

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