Carly inherited some money from her grandfather and put it in a bank account that earns 11% interest compounded monthly. After 8 years, Carly had 1,000.00 in the bank account. How much interest did she earn?

Solution

C a r l y inh er i t e d so m e m o n ey f ro m h er 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 11% 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, C a r l y ha d 1, 000.00 in t h e bank a cco u n t . Ho w m u c h in t eres t d i d s h e e a r n ?

Interest : 583.55

Solution steps

Translate the problem into an equation:

1000 = 416.44905 \dots + I

Solve for

I, 1000 = 416.44905 \dots + I : I = 583.55

Interest : 583.55