Question

Your make $690.78 on 5.8% compounded annually that the account was opened 8 years ago. What was your initial deposit 8 years ago?

Answer 1

$439.98

Explanation:

The initial deposit is the principal invested P

Step one:

we want to solve for the principal using the compound interest formula.

the formula is

A=P(1+r)^t

Step two:

given data

Final amount A=690.78

time t=8 years

rate r= 5.8%= 0.058

Step three:

Substituting in the expression we have

690.78=P(1+0.058)^8

690.78=P(1.058)^8

690.78=P*1.57

P=690.78/1.57

P=$439.98

The initial deposit is $439.98