Russell and Mary deposit 7,000.00 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 2 years. How much will they be able to spend?

Solution

Russell and Mary deposit 7, 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 2 years. How much will they be able to spend?

Solution

Amount : 9397.3

Solution steps

Translate the problem into an equation:

A = 7000 (1 + \frac{0.15}{4})^{4 \cdot 2}

7000 (1 + \frac{0.15}{4})^{4 \cdot 2} = 9397.29548 \dots

Round to the nearest hundredth:

9397.3

Amount : 9397.3

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