Question

lex has $1,780.80 in his savings in his saving account that he opened 6 years ago his account has an annual interest rate of 6.8% compounded annually how much money did lex use to open his savings

Answer 1

To find the principal, P we can use the same formula, A=P(1+rn)nt. We have the balance of the account, A, after 6 years, $1,780.80. The interest rate, r, is 6.8% (or 0.68 as a decimal) and is compounded annually, so n=1. The time, t, is 6, since we know he opened his account 6 years ago. Plug in the known values into the formula and solve for the missing variable, P.

Explanation:

1,780.80 = P (1+0.0681 divided 1^(6)

1,780.80= 1.484P

1,200=P the principal amount Lex used to open his account 6 years ago