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Tessa opened a savings account and deposited 1,000.00 as principal. The account earns 2% interest, compounded monthly. What is the balance after 8 years?

Solution

Tessa opened a savings account and deposited 1, 000.00 as principal. The account earns 2% interest, compounded monthly. What is the balance after 8 years?

Solution

Amount : 1173.35

Solution steps

Translate the problem into an equation:

A = 1000 (1 + \frac{0.02}{12})^{12 \cdot 8}

1000 (1 + \frac{0.02}{12})^{12 \cdot 8} = 1173.35458 \dots

Round to the nearest hundredth:

1173.35

Amount : 1173.35

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