Francisco has a savings account balance of $2,033.88. The interest rate on the account is 2.9% compounded monthly. If he opened the account nine years ago, what was the value of his initial deposit? (2 points)

Select one:

a. $701.34

b. $932.18

c. $1,567.15

d. $1,975.81

Question

Francisco has a savings account balance of $2,033.88. The interest rate on the account is 2.9% compounded monthly. If he opened the account nine years ago, what was the value of his initial deposit? (2 points)


Select one:


a. $701.34 

b. $932.18 

c. $1,567.15 

d. $1,975.81

anonymous · Answer

The formula for compount interest is: $$A=P(1+i)^n$$
We know his present amount, $A$,  and we know $n$ and $i$ so we can isolate for $P$:
$A=$2033.88$
$i=\frac{0.029}{12}$
$n=9*12$

$2033.88=P(1+\frac{0.029}{12})^{108}$ 
$2033.88=1.297819P$
$P\dot{=}1567.15$

Therefore the answer is C