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To pay for new machinery in 7 years, a company owner invests 20,000 at 7.5% compounded quarterly. How much money will be available in 7 years? Round your answer to the nearest cent.

Solution

To pay for new machinery in 7 years, a company owner invests 20, 000 at 7.5% compounded quarterly. How much money will be available in 7 years? Round your answer to the nearest cent.

Solution

Amount : 33645.22

Solution steps

Translate the problem into an equation:

A = 20000 (1 + \frac{0.075}{4})^{4 \cdot 7}

20000 (1 + \frac{0.075}{4})^{4 \cdot 7} = 33645.22249 \dots

Round to the nearest hundredth:

33645.22

Amount : 33645.22

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