Question 820451: Can you please show me how to figure this out:
Les Hinckle made a deposit in the bank on January 1, 2005. The bank pays interest at the rate of 8% compounded annually. On January 1, 2012, the deposit has accumulated to $ 30,000. How much money did Les originally deposit on January 1, 2005?
(the formula in my book has me confused)
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! Les Hinckle made a deposit in the bank on January 1, 2005. The bank pays interest at the rate of 8% compounded annually. On January 1, 2012, the deposit has accumulated to $ 30,000. How much money did Les originally deposit on January 1, 2005?
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A(t) = P(1+(r/n))^(nt)
30,000 = P(1+(0.08/1))^(1*7)
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P = 30,000/(1.08^7)
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P = $17,504.17
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Cheers,
Stan H.
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