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Bernie invested a sum of money 8 yr ago in a savings account, which has since paid interest at the rate of 3%/year, compounded monthly. His investment is now worth $39,396.92. How much did he originally invest?

$ ?

  • math -

    P = Po(1+r)^n.

    P = $39,396.92.

    Po = ?.

    r = (3%/12) / 100% = 0.0025 = Monthly %
    rate expressed as a decimal.

    n = 12Comp/yr * 8yrs = 96 Compounding
    periods.

    P = Po(1.0025)^96 = $39,396.92
    Po*1.27087 = 39,396.92
    Po = $31,000.00 = Initial deposit.

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