Question

Mia earned some money doing odd jobs last summer and put it in a savings account that earns 11% interest, compounded annually. After 10 years, there is $800.00 in the account. How much did Mia earn doing odd jobs?

Answer 1

$281.69

Step-by-step explanation

Let the amount of money she earned doing odd jobs be P.

She put it in a savings account that earned 11% compound interest for 10 years, yielding $800.

To find out how much she earned (put in the account), we have to use the Compound interest formula:

`A=P(1+r)^t`

where A = amount earned (Principal + interest)

P = Principal (amount saved)

r = interest rate

t = amount of years

Therefore, from the question:

A = $800

P = P

r = 11% = 0.11

t = 10 years

Therefore, we have that:

`\begin{gathered} 800=P(1+0.11)^(10)=P(1.11)^(10) \\ 800\text{ = P }\cdot\text{ 2.84} \\ P\text{ = }(800)/(2.84) \\ P\text{ = \$}281.69 \end{gathered}`

That is the amount that she earned doing odd jobs.