document.write( "Question 1092114: Jasmine wants to earn $2000 in simple interest through a bank account earning 5% annually. How much principal would she need to invest in the account to meet her interest goal in 4 yrs? \n" ); document.write( "

Algebra.Com's Answer #706646 by ikleyn(52794) $\"\"$ $\"About$

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document.write( "Let x be her principal. Then her account grows each year according the formula\r\n" );
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document.write( "A = x*(1+0.05)^t = x*1.05^t:\r\n" );
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document.write( "t, year   Account\r\n" );
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document.write( "1         1.05x\r\n" );
document.write( "2         1.05^2*x = 1.1025*x\r\n" );
document.write( "3         1.05^3*x = 1.1576*x\r\n" );
document.write( "4         1.05^4*x = 1.2155*x\r\n" );
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document.write( "So, if she wants to earn $2000 as simple interest in 4 years, her principle must be\r\n" );
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document.write( "1.2155x - x = 2000  ====>  (1.2155-1)*x = 2000  ====>  x =  = $9280.74   (or $9280.75 ?).\r\n" );
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