Reba opened a savings account 10 years ago. The account earns 2% interest, compounded monthly. If the current balance is 300.00, how much did she deposit initially?

Solution

Solution

Principal : 245.66

Solution steps

Translate the problem into an equation:

300 = P (1 + \frac{0.02}{12})^{12 \cdot 10}

Solve for

P, 300 = P (1 + \frac{0.02}{12})^{12 \cdot 10} : P = 245.66

Principal : 245.66

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