Anthony invested a sum of money 4 yr ago in a savings account that has since paid interest at the rate of 8%/year compounded quarterly. His investment is now worth $20,591.80. How much did he originally invest? Please round the answer to the nearest cent.
A) $15,000.01
B) $14,500.01
C) $16,000.01
D) $13,500.01
E) $17,000.01

Question

Anthony invested a sum of money 4 yr ago in a savings account that has since paid interest at the rate of 8%/year compounded quarterly. His investment is now worth $20,591.80. How much did he originally invest? Please round the answer to the nearest cent. ​
A) $15,000.01
B) $14,500.01
C) $16,000.01
D) $13,500.01
E) $17,000.01

Quizplus · Accepted Answer

The correct answer is A.The formula for compound interest is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal (original investment), r is the annual interest rate, n is the number of times per year that the interest is compounded, and t is the number of years.In this case, A = $20,591.80, r = 8%, n = 4 (since the interest is compounded quarterly), and t = 4. Substituting these values into the formula, we get:$20,591.80 = P(1 + 0.08/4)^(4*4)$20,591.80 = P(1.02)^16$20,591.80 = P(1.3842)P = $20,591.80 / 1.3842P = $15,000.01 (rounded to the nearest cent)

Anthony Invested a Sum of Money 4 Yr Ago in a Savings