How much would you need to deposit in an account now in order to have $3000 in the account in 10 years? Assume the account earns 3% simple interest. Round your answer to the nearest cent.

Answer 1

$2307.69 earns about $69.23 interest per year

at simple interest with no compounding after 10 years that's about $692.31

add 2307.69 to 692.21 = $3,000

10(.03)x + x = 3000

1.3x = 3000

x = 3000/1.3 = 2307.69

if there had been annual compounding then

x(1.03)^10 = 3000

x = $2,232.10 needed to grow to $3,000