Answer:
Principle should be $2,667
Step-by-step explanation:
We need $3000 for a vacation to Europe in 3 years.
Using amount formula,
[tex]A=P(1+r)^t[/tex]
Where, P is principle (P=?)
A is amount (A=3000)
r is rate of interest (r=0.04)
t is time (t=3)
Substitute the values into formula and solve for P
[tex]3000=P(1+0.04)^3[/tex]
[tex]3000=P(1.04)^3[/tex]
[tex]P=\frac{3000}{1.04^3}[/tex]
[tex]P=2666.98[/tex]
[tex]P\approx \$2667[/tex]
Hence, Principle should be $2,667
