Question

Bert opened a savings account 4 years ago the account earns 13%interest compounded monthly if the current balance is 1,000.00 how much did he deposit initially

Answer 1

To answer this question we need to remember the formula:

`A=P(1+(r)/(n))^(nt)`

where r is the interest rate, n is the number of times it is compounded in a given time t.

In this case we know that A=1,000, r=0.13, n=12 and t=13. Plugging this values in the formula and solving for P we have:

`\begin{gathered} 1000=P(1+(0.13)/(12))^(12\cdot4) \\ P=(1000)/((1+(0.13)/(12))^(12\cdot4)) \\ P=596.19 \end{gathered}`

Therefore, the initial deposit was $596.19