Question

Chelsea has a savings account that pays 6% annual interest, compounded monthly, and she has made no deposits or withdrawals since opening the account. She receives monthly statements via e-mail, and the statement she just received reported a balance of $800.00. Assuming that she has had the account open for over two months, what was the balance on the previous statement to the nearest cent?

Answer 1

x+x*6/100 + x*6/100 = x + 2*x*6/100 = 800 so
1.12*x = 800 so
x = 800/1.12 = 714.285 =(round it)= 714.29 $

Answer 2

Answer: $782.02

Step-by-step explanation: Balance, P = $800; Rate, R = 6%; Time, T= 1/12

∴ Interest, I = P*R*T/100

I = 800 X 6 x 1/12/100 = $4

Second month = $(800 - 4) = $796

I = 796 X 6 X 1/12/100 = $3.98

First month = $(796 - 3.98) = $782.02