A student loan you took out is due in 3 years and requires repayment of $3,000. To pay off the loan, you set aside money in an account that pays 7% interest.

To meet your obligation, how much money do you need to deposit in the account?

P = $2448.89

P ~ = $2,449

He need to deposit $2,449

Step-by-step explanation:

Given:

Interest rate r = 7% = 0.07

Number of years n = 3 years

Future value that should be meet A = $3000

We need to calculate the initial investment (Principal P). Using the compound interest formula:

A = P (1+r) ^n

P = A / (1+r) ^n

Substituting the values of A, r, n, we have;

P = 3000 / (1+0.07) ^3

P = $2448.89

P ~ = $2,449