\(A=P(1+ \frac{r}{n})^{nt}\)
A=final amount
P=amount investeed
r=rate in decimal
n=number of times per year compounded
we need to solve for P
easy
\(A=P(1+ \frac{r}{n})^{nt}\)
divide both sides by \((1+ \frac{r}{n})^{nt}\)
\(\frac{A}{(1+ \frac{r}{n})^{nt} } =P\)
there are 365 or 366 days in a year depending on leap years (actually there are about 365.25 days per year so we jsut add 1 day every 4 years)
we will use 365 for number of days in a year
A=21171.63
P=P
r=4.5%=0.045
t=10
n=365
\(\frac{21171.63}{(1+ \frac{0.045}{365})^{(365)(10)} } =P\)
use your calculator
13500=P
initial investment was $13500
