# SOLUTION: Please help me solve this problem: If you earn \$3,000 over 10 years on an investment that pays 5% compounded annually, what was the principle amount you started with?

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 Click here to see ALL problems on Evaluation Word Problems Question 414304: Please help me solve this problem: If you earn \$3,000 over 10 years on an investment that pays 5% compounded annually, what was the principle amount you started with? Found 2 solutions by ewatrrr, mananth:Answer by ewatrrr(10682)   (Show Source): You can put this solution on YOUR website! ``` Hi Earning \$3,000 over 10 years on an investment that pays 5% compounded 'annually' Note: A= P(1+r/n) ^nt OR in this case: P + I = P(1+r) ^t and I = P[(1+r)^t - 1] \$3000 = P[(1.05)^10 - 1] \$3000/.6289 = P \$4770.23 = p CHECKING our Answer*** \$7770.23 = \$4770.23(1.05)^10 ```Answer by mananth(12270)   (Show Source): You can put this solution on YOUR website!A=p(1+r/n)^nt p+3000=p(1+0.05/10)^100 p+3000+1.65p 0.65p=3000 p=3000/0.65 P= \$4,675