You want to save $5,000 for future family vacation. if the bank pays 4.3% compounded monthly for 3 years, then how much will you need to invest to reach your vacation goal?

The principal amount invested is $4395.93 .

Step-by-step explanation:

Given as :

The Amount that saved for future = A = $5,000

The bank applied rate of interest = r = 4.3% compounded monthly

The time period of loan = t = 3 years

Let the principal amount invested = $p

Now, From monthly Compound Interest method  

Amount = principal ×

Or, A = p ×

Or, $5000 = p ×

Or, $5000 = p ×

Or, $5000 = p × 1.137414

∴ p =

i.e p = $4395.93

So, The principal amount invested = p = $4395.93

Hence, The principal amount invested is $4395.93 . Answer

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