Answer: $13456 should be deposited.
Step-by-step explanation:
The principal was compounded quarterly. This means that it was compounded 4 times in a year. So
n = 4
The rate at which the principal was compounded is 8%. So
r = 8/100 = 0.08
It was compounded for 5 years. Therefore,
t = 4
The formula for compound interest is
A = P(1+r/n)^nt
A = total amount in the account at the end of t years. The total amount is given as $20000. Therefore
20000 = P(1+0.08/4)^4×5
21000 = P(1+0.02)^20
21000 = P(1.02)^20
P = 20000/1.486
P = $13456
