Vijay inherited some money from his grandfather and put it in a bank account that earns 5% interest compounded monthly. After 8 years, Vijay had 500.00 in the bank account. How much interest did he earn?

Solution

Vija y inh er i t e d so m e m o n ey f ro m hi s g r an df a t h er an d p u t i t in a bank a cco u n t t ha t e a r n s 5% in t eres t co m p o u n d e d m o n t h l y . A f t er 8 ye a rs, Vija y ha d 500.00 in t h e bank a cco u n t . Ho w m u c h in t eres t d i d h e e a r n ?

Interest : 164.56

Solution steps

Translate the problem into an equation:

500 = 335.43866 \dots + I

Solve for

I, 500 = 335.43866 \dots + I : I = 164.56

Interest : 164.56