Question

How much principal, to the nearest dollar, should you invest at 4% in order to have $3,000 for a vacation to Europe in 3 years?

Answer 1

You have to come up with an equation - your principal (x) increases by 4% each year for three years to get $3000, so:

x(1.04)^3=3000
Solving for x, you should get approximately $2667.

Do you understand how I got the equation?

Answer 2

thanks