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How much must you deposit in an account that pays 7% annual interest compounded yearly to have a balance of $550 after 5 years?
550 is not the a in y=a*b^x, 550 is y but I am looking for a. I have 550=a(1.07)^5 but what do I do next


Sagot :

Answer:

  • $392 (rounded)

Step-by-step explanation:

You have this correct:

  • 550 = a(1.07)⁵

The next step:

  • 550 = a*1.4 (rounded)
  • a = 550/1.4
  • a = 392 (rounded to the whole number)