7 years ago, Wyatt won some money in the lottery and put it in a bank account that earns 15% interest compounded annually. If Wyatt currently has 100.00 in the bank account, how much interest has he earned?

Solution

7 ye a rs a g o, W y 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 15% in t eres t co m p o u n d e d ann u a ll y . I f W y a tt c u rre n tl y ha s 100.00 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 ?

Interest : 62.41

Solution steps

Translate the problem into an equation:

100 = 37.59370 \dots + I

Solve for

I, 100 = 37.59370 \dots + I : I = 62.41

Interest : 62.41