Question

Gianni deposited money into an account in which interest is compounded monthly at a rate of 4.5%. He made no other deposits or withdrawals and the total amount in his account after 9 months was $1820.30.

How much did he deposit?


$1215


$1225


$1740


$1760

Answer 1

$1760

Explanation:

Got it right on the test.

Answer 2

Answer: $ 1760

Explanation:

Using the formula for calculating amount :

`A = P(1+r/n)^(n/12)` , since it is compounded monthly

A = amount

P = principal

r = rate %

n = number of years

substituting into the formula , we have

1820.30 =
`P(1+(0.045)/(9)) ^(9/12)`

1820.30= P (
`1.005)^(0.75)`

1820.30 = P( 1.)

Therefore:

P = 1820.30 / 1.033747661

P = $ 1760