Whitney deposited money into an account in which interest is compounded quarterly at a rate of

2.9%. She made no other deposits or withdrawals and the total amount in her account after 12 years

was $10,891.31.

How much did she deposit?

O

$7700

O

$8650

O

$9700

o $10,580

Next

The inicial deposit is $7700

Step-by-step explanation:

The equation that describes a compound interest is:

P = Po * (1 + (r/n)) ^ (t*n)

Where P is the final value, Po is the inicial value, r is the rate, t is the amount of time and n is defined by the period that the interest is compounded

As in our case the interest is compounded quarterly, we have n = 4.

We also have that P = 10,891.31, r = 2.9% = 0.029 and t = 12

Then, we can calculate for Po:

10891.31 = Po * (1 + 0.029/4) ^ (12*4)

10891.31 = Po * (1 + 0.00725) ^ (48)

10891.31 = Po * 1.414455

Po = 10891.31 / 1.414455 = 7700

So the inicial deposit is $7700