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Scott is saving for a down payment to buy a house. The account earns 7.7% interest compounded semi-annually, and he wants to have $10,000 in 5 years. What must his principal be? Round your answer to the nearest cent and do not include the dollar sign. Do not round at any other point in the solving process; only round your answer.

Respuesta :

Answer:

$6,853.86

Step-by-step explanation:

Use the compound interest formula A=P(1+r/n)[tex]^{nt}[/tex] and substitute the values given: A=10,000, r=0.077, n=2, t=5.  

10,000=P(1+0.077/2)[tex]^{2(5)}[/tex]

P=10,000(1+0.077/2)[tex]^{2(5)}[/tex] ≈ $6853.86

Answer:

$6853.86

Step-by-step explanation:

Use the compound interest formula A=P(1+rn)nt and substitute the values given: A=10,000, r=0.077, n=2, t=5.  

10,000PP=P(1+0.0772)2(5)=10,000(1+0.0772)2(5)≈$6853.86