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Billy and Clare deposit 2,000.00 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

Billy and Clare deposit 2, 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 : 2684.94

Solution steps

Translate the problem into an equation:

A = 2000 (1 + \frac{0.15}{4})^{4 \cdot 2}

2000 (1 + \frac{0.15}{4})^{4 \cdot 2} = 2684.94156 \dots

Round to the nearest hundredth:

2684.94

Amount : 2684.94

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