Question

Jayden earned some money doing odd jobs last summer and put it in a savings account that earns 12% interest compounded monthly. After 5 years, there is $400.00 in the account. How much did Jayden earn doing odd jobs?

Answer 1

$220.18

Explanation:

The amount A(n) accrued for P dollars saved at r% annual interest for a period of n years compounded k times is derived using the formula:

`A(n)=P \left(1+(r)/(k)\right)^(nk)`

In Jayden's case:

• A(n)=$400
• r=12%=0.12
• n=5 years
• k=12 Months

We want to determine the amount Jayden put in the savings account.

`400=P \left(1+(0.12)/(12)\right)^(12*5)\\400=P \left(1+0.01}\right)^(60)\\400=P \left(1.01}\right)^(60)\\P=(400)/(\left(1.01)\right)^(60)}\\`

`P=\$220.18`

Jayden earned $220.18 from doing odd jobs.