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Gen is interested in seeing how the money grows. Her mom suggests that she take the money in her piggy bank....

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2 Answers

Remember that the formula for interest problems is: A = P(1+(i/n))nt
 
where A = amount
         P = principal (the dollars you start with)
         i = annual interest rate
         n = number of times compounded per year
         t = number of years
 
In this problem P = 700, i = 0.085, n = 4 (quarterly), and t = 10
 
So, the equation becomes  A = 700(1 + (0.085/4))4*10
 
 
If 8.5% is the APR, annual percentage rate, then the total sum after 10 years will be
S=$700*(1+0.085/4)4*10=$1,623.23
If it is the interest rate in one quarter, then
S=$700*(1+0.085)4*10=$18,293.11

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