Randall has an account balance of $675.54 in a savings account that earns interest at a rate of 2.5% compounded twice a year. If Randall opened the account eleven years ago, what was the principal deposit rounded to the nearest dollar?
This equaton gets used over and over...it would be good te commit it to memory
FV =PV (1+i)^n Fv = future value PV= present value i= interest in decimal PER PERIOD n= PERIODS
the period for this equaton is twice per year x 11 years = 22 periods
interest per period = 2.5 annual / 2 = 1.25
675.54 = PV(1.0125)^22
PV = ~~ $ 514. initial deposit 11 years ago