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Popular Word Problems >

Tessa opened a savings account and deposited 1,000.00 as principal. The account earns 2% interest, compounded monthly. What is the balance after 8 years?

Solution

T ess a 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 1, 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 2% 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 8 ye a rs ?

Solution

Amount : 1173.35

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.02}{12})^{12 \cdot 8}

1000 (1 + \frac{0.02}{12})^{12 \cdot 8} = 1173.35458 \dots

Round to the nearest hundredth:

1173.35

Amount : 1173.35

Popular Examples

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