Perry opened a savings account 8 years ago. The account earns 15% interest, compounded annually. If the current balance is 500.00, how much did he deposit initially?

Solution

Solution

Principal : 163.45

Solution steps

Translate the problem into an equation:

500 = P (1 + \frac{0.15}{1})^{1 \cdot 8}

Solve for

P, 500 = P (1 + \frac{0.15}{1})^{1 \cdot 8} : P = 163.45

Principal : 163.45

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