Simon opened a savings account and deposited 800.00 as principal. The account earns 6% interest, compounded monthly. How much interest will he earn after 3 years?Round your answer to the nearest cent.

Solution

S im o n 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 800.00 a s p r in c i p a l . T h e a cco u n t e a r n s 6% in t eres t, co m p o u n d e d m o n t h l y . Ho w m u c h in t eres t w i ll h e e a r n a f t er 3 ye a rs ? R o u n d yo u r an s w er t o t h e n e a res t ce n t .

Interest : 157.34

Solution steps

Translate the problem into an equation:

957.34441 \dots = 800 + I

Solve for

I, 957.34441 \dots = 800 + I : I = 157.34

Interest : 157.34