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Popular Word Problems >

Nicholas opened a savings account and deposited 700.00 as principal. The account earns 3% interest, compounded monthly. What is the balance after 7 years?

Solution

N i c h o l a s o p e n e d a s a v in g s a cco u n t an d d e p os i t e d 700.00 a s p r in c i p a l . T h e a cco u n t e a r n s 3% in t eres t, co m p o u n d e d m o n t h l y . Wha t i s t h e ba l an ce a f t er 7 ye a rs ?

Solution

Amount : 863.35

Solution steps

Translate the problem into an equation:

A = 700 (1 + \frac{0.03}{12})^{12 \cdot 7}

700 (1 + \frac{0.03}{12})^{12 \cdot 7} = 863.34836 \dots

Round to the nearest hundredth:

863.35

Amount : 863.35

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