Question

On the 1st January 2014 Carol invested some money in a bank account.
The account pays 2.5% compound interest per year.
On 1st January 2015 Carol withdrew £1000 from the account.
On 1st January 2016 she had £23 517.60 in the account.
Work out how much Carol originally invested in the account.

Answer 1

amount Jan 2014 ---- x
amount Jan 2015 = x(1.025) - 1000
amount Jan 2016 = [x(1.025) - 1000](1.025) = 23 517.60
x(1.025) - 1000 = 2 3517.6/1.025 = 22 944.00
x(1.025) = 23 944.00
x = 23944.00/1.025
= 23 360.00