Tracy opened a savings account 10 years ago. The account earns 7% interest, compounded annually. If the current balance is 800.00, how much did she deposit initially?

Solution

Solution

Principal : 406.68

Solution steps

Translate the problem into an equation:

800 = P (1 + \frac{0.07}{1})^{1 \cdot 10}

Solve for

P, 800 = P (1 + \frac{0.07}{1})^{1 \cdot 10} : P = 406.68

Principal : 406.68

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