6 years ago, Greg won some money in the lottery and put it in a bank account that earns 1% interest compounded monthly. If Greg currently has 100.00 in the bank account, how much interest has he earned?

Solution

6 ye a rs a g o, G re g 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 1% in t eres t co m p o u n d e d m o n t h l y . I f G re g 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 : 5.82

Solution steps

Translate the problem into an equation:

100 = 94.17880 \dots + I

Solve for

I, 100 = 94.17880 \dots + I : I = 5.82

Interest : 5.82