Answer: The student should deposit= $3,272.40
Explanation:
The formula we need to use is
FV
=
P
(
1
+
rt
)
where:
F
V = the future value.
P
= the principal amount.
r=
the rate of interest. = `12%= 0.12
t= time in years.
= 4/12= 1/3 =O.3333
FV
=
P
(
1
+
rt
)
$3,400 = P (1 + 0.12 X 0.3333)
$3,400 = P (1 + 0.039)
$3,400 = P (1.039)
P= 3400 /1.039= $3,272.40
