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7 June, 19:04

Your savings account currently has a balance of $32,300. You opened the savings account two years ago and have not added to the initial amount you deposited. If your savings have been earning an annual interest rate of 2 percent, compounded annually, what was the amount of your original deposit?

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  1. 7 June, 22:08
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    Original deposit = $31,045.75

    Explanation:

    Giving the following information:

    Your savings account currently has a balance of $32,300.

    You opened the savings account two years ago.

    Interest rate = 2 percent, compounded annually

    To calculate the original sum we need to use the following formula:

    PV = FV / (1+i) ^n

    PV = 32,300 / (1.02^2) = $31,045.75
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