Tessa opened a savings account and deposited 200.00 as principal. The account earns 2% interest, compounded monthly. What is the balance after 5 years?

Solution

Solution

Amount : 221.02

Solution steps

Translate the problem into an equation:

A = 200 (1 + \frac{0.02}{12})^{12 \cdot 5}

200 (1 + \frac{0.02}{12})^{12 \cdot 5} = 221.01578 \dots

Round to the nearest hundredth:

221.02

Amount : 221.02

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