Question

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?

Answer 1

Answer: $800

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