Money is invested into an account earning 4.25% interest compounded annually. If the accumulated value after 18 years will be $25,000, approximately how much money is presently in the account?

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Answer 1 · 2018-05-02T19:03:13

You would have about #$11,800# now.

You are trying to find the Principal amount.

#P(1+r)^n =A#

#P(1+0.0425)^18 = 25,000#

#P(1.0425)^18=25,000#

#P = 25000/(1.0425^18#

#P = 11,818.73#

You would have about #$11,800#