Question
upstudy study bank question image url

\( \mathrm{A}=\mathrm{P}(1+i)^{n} \) \( \therefore 400000=\mathrm{P}(1+0,15)^{5} \quad \) Substitute known value

Ask by Mckenzie Carter. in South Africa
Mar 08,2025

Upstudy AI Solution

Tutor-Verified Answer

Answer

\( P \approx 198,706.4 \)

Solution

\[ \textbf{Step 1: Write the formula.} \] The compound interest formula is given by \[ A = P(1+i)^n. \] \[ \textbf{Step 2: Substitute known values.} \] We have \( A = 400000 \), \( i = 0.15 \), and \( n = 5 \). Substituting these values in, we get \[ 400000 = P(1+0.15)^5 \quad \Longrightarrow \quad 400000 = P(1.15)^5. \] \[ \textbf{Step 3: Solve for } P. \] Dividing both sides by \( (1.15)^5 \) gives \[ P = \frac{400000}{(1.15)^5}. \] \[ \textbf{Step 4: Calculating } (1.15)^5. \] We calculate \[ (1.15)^5 \approx 2.01136. \] \[ \textbf{Step 5: Substitute the approximate value back.} \] Thus, \[ P \approx \frac{400000}{2.01136} \approx 198706.4. \] \[ \textbf{Final Answer:} \quad P \approx 198706.4. \]

Answered by UpStudy AI and reviewed by a Professional Tutor

error msg
Explain
Simplify this solution

Mind Expander

Did you know that this formula is essentially a way to calculate the future value of an investment or savings account? The "P" represents the principal amount you start with, while \( (1+i)^n \) shows how that principal grows over time with interest compounded annually. It's like watching your money grow into a tree of cash! 🌳💰 When solving for "P," a common mistake is forgetting to properly calculate the compounding amount. In this case, ensure you accurately compute \( (1+0.15)^5 \) before rearranging the equation. Double-checking your math after plugging in values can save you from miscalculations and missed opportunities! 📊🔍

Try Premium now!
Try Premium and ask Thoth AI unlimited math questions now!
Maybe later Go Premium
Study can be a real struggle
Why not UpStudy it?
Select your plan below
Premium

You can enjoy

Start now
  • Step-by-step explanations
  • 24/7 expert live tutors
  • Unlimited number of questions
  • No interruptions
  • Full access to Answer and Solution
  • Full Access to PDF Chat, UpStudy Chat, Browsing Chat
Basic

Totally free but limited

  • Limited Solution
Welcome to UpStudy!
Please sign in to continue the Thoth AI Chat journey
Continue with Email
Or continue with
By clicking “Sign in”, you agree to our Terms of Use & Privacy Policy