Megan opened a savings account 7 years ago. The account earns 6% interest, compounded quarterly. If the current balance is 200.00, how much did she deposit initially?

Solution

Solution

Principal : 131.82

Solution steps

Translate the problem into an equation:

200 = P (1 + \frac{0.06}{4})^{4 \cdot 7}

Solve for

P, 200 = P (1 + \frac{0.06}{4})^{4 \cdot 7} : P = 131.82

Principal : 131.82

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