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Approximately how much principal would need to be placed into an account earning 3.575% interest compounded
quarterly so that it has an accumulated value of $68,000 at the end of 30 years?
a $23,706
b. $23,377
C. $52,069
d. $58,944

Respuesta :

Answer: $23,377

Step-by-step explanation:

onyebuchinnaji

Approximately the principal that is needed to be placed to accumulate the given amount is $23,377.

The given parameters:

  • Interest rate , I = 3.575%
  • Amount accumulated, A = $68,000
  • Time period, t = 30 years
  • The number cycles, n = 4

What is compound interest?

Compound interest is the accumulated interest over a given period of investment.

The principle amount is determined from compound interest formula as shown below;

[tex]A = P( 1 + \frac{r}{n} )^{nt}\\\\68,000 = P (1 + \frac{0.03575}{4} )^{(4 \times 30)}\\\\68,000 = P(1.00894)^{120}\\\\P = \frac{68,000}{(1.00894)^{120}} \\\\P = \$23,370.5 \[/tex]

Thus, approximately the principal that is needed to be placed to accumulate the given amount is $23,377.

Learn more about compound interest here: https://brainly.com/question/24924853

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