Fill in the blanks. (Round your answers to the nearest dollar.)
Interest Principal Rate Time Future Value
$437 $ 5% 8 yr $
To fill in the blank spaces, we need to calculate the missing principal amount.
The formula to calculate the future value with compound interest is:
Future Value = Principal * (1 + Rate)^Time
In this case, the future value is given as $437, the rate is 5% (0.05), and the time is 8 years.
Using the formula, we can rearrange it to solve for the principal:
Principal = Future Value / (1 + Rate)^Time
Now we can substitute the given values:
Principal = $437 / (1 + 0.05)^8
Calculating this equation yields:
Principal = $437 / (1.05)^8
Using a calculator, we find:
Principal ≈ $292.72 (rounded to the nearest dollar)
Therefore, the missing principal amount is approximately $292.