Hannah opened a savings account 10 years ago. The account earns 8% interest, compounded annually. If the current balance is 300.00, how much did she deposit initially?

Solution

Solution

Principal : 138.96

Solution steps

Translate the problem into an equation:

300 = P (1 + \frac{0.08}{1})^{1 \cdot 10}

Solve for

P, 300 = P (1 + \frac{0.08}{1})^{1 \cdot 10} : P = 138.96

Principal : 138.96

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