SOLUTION: Suppose you want to be able to save $7,000 by the time that you graduate four years from now. If you plan to invest in an account that earns 3% interest compounded annually, how la

Question 1015079: Suppose you want to be able to save $7,000 by the time that you graduate four years from now. If you plan to invest in an account that earns 3% interest compounded annually, how large will your initial investment have to be?
Answer by robertb(5830) (Show Source): You can put this solution on YOUR website!
Use the compound balance formula
Upon substitution, we get

Thus the initial investment should be $6,219.41.
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