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Popular Word Problems >

Mason opened a savings account and deposited 2,000.00 as principal. The account earns 4% interest, compounded monthly. What is the balance after 7 years?

Solution

M a so n o p e n e d a s a v in g s a cco u n t an d d e p os i t e d 2, 000.00 a s p r in c i p a l . T h e a cco u n t e a r n s 4% in t eres t, co m p o u n d e d m o n t h l y . Wha t i s t h e ba l an ce a f t er 7 ye a rs ?

Solution

Amount : 2645.03

Solution steps

Translate the problem into an equation:

A = 2000 (1 + \frac{0.04}{12})^{12 \cdot 7}

2000 (1 + \frac{0.04}{12})^{12 \cdot 7} = 2645.02772 \dots

Round to the nearest hundredth:

2645.03

Amount : 2645.03

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