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

Answer:

$220.18

Step-by-step 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:

$A(n)=P \left(1+\dfrac{r}{k}\right)^{nk}$

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.

$400=P \left(1+\dfrac{0.12}{12}\right)^{12*5}\\400=P \left(1+0.01}\right)^{60}\\400=P \left(1.01}\right)^{60}\\P=\dfrac{400}{\left(1.01}\right)^{60}}$

$P=\ 220.18$

Jayden earned $220.18 from doing odd jobs.