mmaashiq
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Cynthia invests some money in a bank which pays 5% compound interest per year.
She wants it to be worth over £8000 at the end of 3 years.
What is the smallest amount, to the nearest pound, she can invest?

Respuesta :

The answer to your question is £6911

lavanyaande

She can invest £6911.

Step-by-step explanation:

Given,

Amount (A) =  £8000

Time (T) = 3 years

Rate of interest (r) = 5%

To find the principle(P)

Formula

A = [tex]P(1+\frac{r}{100})^{T}[/tex]

Now,

Putting the values of A, T, r we get,

8000 = [tex]P(1+\frac{5}{100} )^{3}[/tex]

or, P = 8000÷1.05³

or, P = 6910.7 (approx)

Hence,

She can invest £6911.

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