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Andrew opened a savings account and deposited $800. He earned 1.6 percent interest, compounded annually. At the end of the year, he has $812.80. What is the principal?
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30 votes
30 votes
Andrew opened a savings account and deposited $800. He earned 1.6 percent interest, compounded annually. At the end of the year, he has $812.80. What is the principal?

User Danielfishr
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1 Answer

15 votes
15 votes

Answer: $800

Step-by-step explanation:

Compound interest formula:

A = P(1 + r/n)^nt

In our case:

812.80 = 800(1 + 0.016)^1

Very clear that 800 is the principle

User Skarface
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3.1k points
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