Respuesta :
Step 1. The information that we have is:
The final amount that Michael wants to save is:
[tex]A=55,000[/tex]We will call that amount A.
The annual percentage rate of the investment, which we will label as r, is:
[tex]r=8.5[/tex]We will need this annual percentage rate represented as a decimal number, therefore, we divide it by 100:
[tex]\begin{gathered} r=8.5/100 \\ r=0.085 \end{gathered}[/tex]The time of the investment, t, is 3 years:
[tex]t=3[/tex]And it is compounded daily, let n be the number of times of compounding in a year:
[tex]n=365[/tex]Step 2. We need to find the initial amount of the investment, which will be called P or principal.
The formula we will use to find it is:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]Step 3. Substituting the known values:
[tex]55,000=P(1+\frac{0.085}{365})^{(365)(3)}[/tex]From this equation, we need to solve the operations and solve for P, the principal amount of the investment.
Step 4. Simplifying the equation:
[tex]55,000=P(1+0.0002328767)^{1095}[/tex]Continue simplifying:
[tex]\begin{gathered} 55,000=P(1.0002328767)^{1,095} \\ 55,000=P(1.2904233) \end{gathered}[/tex]Then, we solve for P:
[tex]\begin{gathered} \frac{55,000}{1.2904233}=P \\ 42,621.6726=P \end{gathered}[/tex]Rounding to the nearest cent (2 decimal places) The amount that he needs to invest is $42,621.67
Answer: $42,621.67
