Question

Todd opened a savings account 2 years ago the account earns 9% interest compounded quarterly if the current balance is 400.00 how much did he deposit initially

Answer 1

Here,

A = 400

t = 2

n = 4

r = 9% = 0.09

Applying the compound interest formula,

`\begin{gathered} A=P(1+(r)/(n))^(nt) \\ 400=P(1+(0.09)/(4))^8 \\ 400=P(1.1948) \\ P=334.77 \end{gathered}`

The initial amount was 334.77.