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jasmime wants to earn 2,000 in simple imterest through a bank account earning 5% annually . how ,uch principal would she need to invest in the account to meet her interest goal in 4 years

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facundobuzzetti

Answer:

To reach the goal, the initial investment should be of:  $1,645.40

Explanation:

Giving the following information:

Jasmine wants to earn 2,000 in simple interest through a bank account earning 5% annually.

To calculate the initial investment, we need to use a variation of the simple interest future value formula:

FV= PV*(1+i)^n

PV= present value

Isolating PV:

PV= FV/(1+i)^n

PV= 2,000/(1.05^4)= 1,645.40

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