If the amount of money was invested before 10 years at a rate of 4% per year, compounded quarterly to get 30000birr. Then what amount of money was invested?

Answer 1

To find the initial investment amount, we can use the formula for compound interest:

A = P(1 + r/n)^(n*t)

Where:
A = Final amount (30000 birr)
P = Principal amount (initial investment)
r = Interest rate per year (4% or 0.04)
n = Number of times interest is compounded per year (quarterly, so 4 times)
t = Number of years (10)

Plugging in the given values into the formula:

30000 = P(1 + 0.04/4)^(4*10)

Simplifying:

30000 = P(1 + 0.01)^(40)
30000 = P(1.01)^40

Now, we need to solve for P:

30000 / (1.01)^40 = P
P ≈ 22428.48

Therefore, the initial investment amount was approximately 22,428.48 birr.