Three years ago, you made a deposit in a savings account with a 4% APR. The...
Three years ago, you made a deposit in a savings account with a 4% APR. The bank pays interest monthly with no compounding. Today you have $1680 in the bank. What was your original deposit?
Homework Answers
P = $1,500.00
Equation:
P = A / (1 + rt)
Calculation:
First, converting R percent to r a decimal
r = R/100 = 4%/100 = 0.04 per year.
Putting time into years for simplicity,
36 months / 12 months/year = 3 years
Solving our equation:
P = 1680 / ( 1 + (0.04 × 3)) = 1500
P = $1,500.00
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