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Popular Word Problems >

After saving money for 3 years at a 5% interest rate compounded monthly, Henry accumulated a total of 2800. How much money did he put into the bank when he started the savings plan?

Solution

A f t er s a v in g m o n ey f or 3 ye a rs a t a 5% in t eres t r a t e co m p o u n d e d m o n t h l y, He n ry a cc u m u l a t e d a t o t a l o f 2800. Ho w m u c h m o n ey d i d h e p u t in t o t h e bank w h e n h e s t a r t e d t h e s a v in g s pl an ?

Solution

Amount : 3252.12

Solution steps

Translate the problem into an equation:

A = 2800 (1 + \frac{0.05}{12})^{12 \cdot 3}

2800 (1 + \frac{0.05}{12})^{12 \cdot 3} = 3252.12224 \dots

Round to the nearest hundredth:

3252.12

Amount : 3252.12

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