Question

Exponents Properties Practice

Write an equation to model the situation and answer the question. Include units when applicable.

In a much happier economy, Mr. Demo earns 5% monthly interest on his savings. After a $300 withdrawal, he notices he has $2021 in his account. He has collected interest for 3 months. What amount did he start with?

Answer 1

we can use this equation to solve:

`a = p(1 + (r)/(n) ) ^(nt)`

a = final amount

p = initial amount

r = percentage increment (in decimal form)

n = amount of time interest is compounded

t= time (in years)

Since the guy w withdrew $300 and saw that his account still has $2021 left, he must have had $2321 in total.

5% interest is .05 in decimal form

since the account is compounded monthly, n=12

Because the account has been collecting interest for 3 months and t is supposed to be in years, dividing 3 by 12 will yield 1/4, or . 25