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

Question

Gen is interested in seeing how the money grows. Her mom suggests that she takes the money in her piggy bank and deposits it in a local bank paying 8.5% compounded quarterly. IF she finds $700 in the piggy bank, how much will it grow to in 10 years?

would i multiply the 8.5% by 4 then use the FV formula?

9/5/2013 | Barbara from Sumter, SC

Answer 1

Ask a Question

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

Gen is interested in seeing how the money grows. Her mom suggests that she takes the money in her piggy bank and deposits it in a local bank paying 8.5% compounded quarterly. IF she finds $700 in the piggy bank, how much will it grow to in 10 years?

would i multiply the 8.5% by 4 then use the FV formula?

9/5/2013 | Barbara from Sumter, SC

Answer 2

Ask a Question

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

Answer 3

Marked as Best Answer

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

9/5/2013 | Jason T.

Answer 4

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

9/5/2013 | Kirill Z.

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

Create a Free Account to Continue

Sign Up

Almost Done

Confirm Password

New Email Required

We Found Your Account

We Found Your Account

Log In

Create New Account

An error occurred

Loading...