Ariana opened a savings account 7 years ago. The account earns 14% interest, compounded monthly. If the current balance is 500.00, how much did she deposit initially?

Solution

Solution

Principal : 188.72

Solution steps

Translate the problem into an equation:

500 = P (1 + \frac{0.14}{12})^{12 \cdot 7}

Solve for

P, 500 = P (1 + \frac{0.14}{12})^{12 \cdot 7} : P = 188.72

Principal : 188.72

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