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Darnel and Isabelle deposit 8,000.00 into a savings account which earns 15% interest compounded quarterly. They want to use the money in the account to go on a trip in 3 years. How much will they be able to spend?

Solution

Darnel and Isabelle deposit 8, 000.00 into a savings account which earns 15% interest compounded quarterly. They want to use the money in the account to go on a trip in 3 years. How much will they be able to spend?

Solution

Amount : 12443.63

Solution steps

Translate the problem into an equation:

A = 8000 (1 + \frac{0.15}{4})^{4 \cdot 3}

8000 (1 + \frac{0.15}{4})^{4 \cdot 3} = 12443.63465 \dots

Round to the nearest hundredth:

12443.63

Amount : 12443.63

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