Pedro opened a savings account 8 years ago. The account earns 7% interest, compounded monthly. If the current balance is 800.00, how much did he deposit initially?

Solution

Solution

Principal : 457.71

Solution steps

Translate the problem into an equation:

800 = P (1 + \frac{0.07}{12})^{12 \cdot 8}

Solve for

P, 800 = P (1 + \frac{0.07}{12})^{12 \cdot 8} : P = 457.71

Principal : 457.71

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