Question

An account bearing interest at 6 percent compounded quarterly was established 15 years ago. The account balance now is $ 10,000. What was the initial amount when the account was established ?

Answer 1

$A=P(1+\frac{r}{n})^{nt}$

$10,000=P(1+\frac{0.06}{4})^{4\times15}$

$10,000=P(1+0.015)^{60}$

$10,000=2.443219776P$

$\\P=\frac{10,000}{2.443219776}$

$P=4,092.959667$

Therefore the initial amount was $4,092.959667