Hunter inherited some money from his grandfather and put it in a bank account that earns 1% interest compounded annually. After 6 years, Hunter had 700.00 in the bank account. How much interest did he earn?Round your answer to the nearest cent.

Solution

H u n t er 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 1% in t eres t co m p o u n d e d ann u a ll y . A f t er 6 ye a rs, H u n t er ha d 700.00 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 ? 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 : 40.57

Solution steps

Translate the problem into an equation:

700 = 659.43166 \dots + I

Solve for

I, 700 = 659.43166 \dots + I : I = 40.57

Interest : 40.57