Wing deposit money into account paying 8% annum compunded quartely. 3 yrs later there is $ 1585.30 in account. What was initial amount deposited?

cgrant2 | Student

The formula for annual compound interest quarterly is: 


A= annual compound interest 

P= principal (initial amount you borrowed) 

r= annual rate 

n= number of years the amount is borrowed for 

We know the following from the equation: 

A= 1585.30

P= x

r = 0.08/4 

n= 3 years 

Solve the equation: 

`1585.30= x (1+ 0.08/4)^3`

`1585.30 = 1.60x`

`x = 990.81`

Therefore intial amount deposited was $990.81