Cassie opened a savings account 2 years ago. The account earns 6% interest, compounded monthly. If the current balance is 800.00, how much did she deposit initially?

Solution

Solution

Principal : 709.75

Solution steps

Translate the problem into an equation:

800 = P (1 + \frac{0.06}{12})^{12 \cdot 2}

Solve for

P, 800 = P (1 + \frac{0.06}{12})^{12 \cdot 2} : P = 709.75

Principal : 709.75

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