Isabella opened a savings account 4 years ago. The account earns 6% interest, compounded monthly. If the current balance is 400.00, how much did she deposit initially?

Solution

Solution

Principal : 314.84

Solution steps

Translate the problem into an equation:

400 = P (1 + \frac{0.06}{12})^{12 \cdot 4}

Solve for

P, 400 = P (1 + \frac{0.06}{12})^{12 \cdot 4} : P = 314.84

Principal : 314.84

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