Billy opened a savings account and deposited 700.00 as principal. The account earns 1% interest, compounded monthly. What is the balance after 5 years?

Solution

Solution

Amount : 735.87

Solution steps

Translate the problem into an equation:

A = 700 (1 + \frac{0.01}{12})^{12 \cdot 5}

700 (1 + \frac{0.01}{12})^{12 \cdot 5} = 735.87444 \dots

Round to the nearest hundredth:

735.87

Amount : 735.87

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