Matthew invests 500 into an account with a 2.5% interest that is compounded quarterly. How much money will he have in this account if he keeps it for 10 years?

Solution

Solution

Amount : 641.51

Solution steps

Translate the problem into an equation:

A = 500 (1 + \frac{0.025}{4})^{4 \cdot 10}

500 (1 + \frac{0.025}{4})^{4 \cdot 10} = 641.51341 \dots

Round to the nearest hundredth:

641.51

Amount : 641.51

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