Paul is saving for a down payment to buy a house. The account earns 13% interest compound quarterly, and he wants to have $15,000 in 4 years. What must his principal be? Round your answer to the nearest cent. Do not round at any point in solving process; only round your answer. Please help ASAP!! Thank you so much!

The principal required is $ 8993.

Using the formula;

A = P(1 + r/n)^nt

Where;

P = principal = ?

r = rate = 0.13

n = Number of times the interest is compounded = 4

t = time = 4years

Amount = $15,000

15,000 = P(1 +  0.13/4)^4(4)

15,000 = P(1.668)

P = 15,000/1.668

P =$ 8993

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The principal must be = $8991.88

Step-by-step explanation:

Formula for compound interest is:

Where A is the amount after 't' years.

P is the principal amount

n is the number of times interest is compounded each year.

r is the rate of interest.

Here, we are given that:

Amount, A = $15000

Rate of interest = 13 % compounded quarterly i.e. 4 times every year

Number of times, interest is compounded each year, n = 4

Time, t = 4 years.

To find, Principal P = ?

Putting all the given values in the formula to find P.

So, the principal must be = $8991.88

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step-by-step explanation:

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