Question 715072
How much would i have to invest at 3% interest compounded annually in order to have $16,000.00 at the end of seven years?
<pre>
We use the formula

A = P(1 + {{{r/n}}})<sup>n·t</sup>

in which

A = the final amount of dollars = $16,000.00
P = the biginning amount of dollars = ??
r = the rate expressed as a decimal = 0.03
n = the number of times per year the interest is compounded = 1
t = the number of years = 7

                  16000 = P(1 + {{{0.03/1}}})<sup>1·7</sup>

                  16000 = P(1 + 0.03)<sup>7</sup>

                  16000 = P(1.03)<sup>12</sup>

                  16000 = P(1.425760887)

               {{{16000/1.425760887}}} = P

              $11222.08 = P



Edwin</pre>