Your grandmother invested a lump sum 26 years ago at 4.25 percent interest.Today,she gave you the proceeds of that investment which totaled $51,480.79.How much did she originally invest?

Question

Quizplus · Accepted Answer

The original investment can be calculated using the formula for compound interest: $ P = \frac{A}{(1 + r)^t} $, where $ A $ is the amount received, $ r $ is the interest rate, and $ t $ is the time in years. Plugging in the values: $ P = \frac{51,480.79}{(1 + 0.0425)^{26}} \approx 17,444.86 $.

Your Grandmother Invested a Lump Sum 26 Years Ago at 4.25