Question

Marcus deposited money into a savings account 10 years ago and it is now worth $2,500. The

account earned 2.1% annual interest over those ten years. Write an equation and then solve to
determine the amount Marcus initially deposited into the savings account. Round your answer to the
nearest cent.

Answer 1

$244.81

Explanation:

A (total amount) = P(principal) · (1 + r/n)^nt

r = interest rate

n = # times per year interest is compounded

t = term of investment

2500 = P[1 + (.021/10)]^10·1

2500 = 1.021199565 · P

P = 244.81