Maya opened a savings account 2 years ago. The account earns 1% interest, compounded annually. If the current balance is 500.00, how much did she deposit initially?

Solution

Solution

Principal : 490.15

Solution steps

Translate the problem into an equation:

500 = P (1 + \frac{0.01}{1})^{1 \cdot 2}

Solve for

P, 500 = P (1 + \frac{0.01}{1})^{1 \cdot 2} : P = 490.15

Principal : 490.15

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