Raymond earned some money doing odd jobs last summer and put it in a savings account that earns 15% interest compounded monthly. After 10 years, there is 600.00 in the account. How much did Raymond earn doing odd jobs

Solution

R a y m o n d e a r n e d so m e m o n ey d o in g o dd j o b s l a s t s u mm er an d p u t i t in a s a v in g s a cco u n t t ha t e a r n s 15% in t eres t co m p o u n d e d m o n t h l y . A f t er 10 ye a rs, t h ere i s 600.00 in t h e a cco u n t . Ho w m u c h d i d R a y m o n d e a r n d o in g o dd j o b s

Principal : 135.13

Solution steps

Translate the problem into an equation:

600 = P (1 + \frac{0.15}{12})^{12 \cdot 10}

Solve for

P, 600 = P (1 + \frac{0.15}{12})^{12 \cdot 10} : P = 135.13

Principal : 135.13