Question

Norma opened a savings account 5 years ago the account earns 7% interest compounded annually if the current balance is 1,000.00 how much did she despoit initially

Answer 1

The formula to calculate the total amount in her savings account after y years, with an interest of 7% is:

`T=S(1.07)^y`

Where S is the inicial saving

Thereby, after 5 years and a total of $1000.00 in her account,

`\begin{gathered} 1000=S(1.07)^5\rightarrow S=(1000)/((1.07)^5) \\ \\ \rightarrow S=712.99 \end{gathered}`

Therefore, Norma's initial deposit was $712.99