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Popular Word Problems >

4 years ago, Matt won some money in the lottery and put it in a bank account that earns 1% interest compounded annually. If Matt currently has 400.00 in the bank account, how much interest has he earned?

Solution

4 ye a rs a g o, M a tt w o n so m e m o n ey in t h e l o tt ery an d p u t i t in a bank a cco u n t t ha t e a r n s 1% in t eres t co m p o u n d e d ann u a ll y . I f M a tt c u rre n tl y ha s 400.00 in t h e bank a cco u n t, h o w m u c h in t eres t ha s h e e a r n e d ?

Solution

Interest : 15.61

Solution steps

Translate the problem into an equation:

400 = 384.39213 \dots + I

Solve for

I, 400 = 384.39213 \dots + I : I = 15.61

Interest : 15.61

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