Willie F. answered 01/30/21
MBA in Business with over 25+ years of training and teaching.
The formula to use = A =P(1+R/N)N*T
Given:
A = Final Amount = $ 300,000
P= Initial Investment = P
R= Interest rate = 5%
N = Number of Compound periods = 1
T= Time = 7 years
Solution:
A =P(1+R/N)N*T
$300,000 = P (1+.05/1) 1*7
$300,000 = P (1.05) 7
$300,000 = P (1.4071)
$300,000 = P
1.4071
Answer P = $ 213,204.46