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Josiah and Rosanne deposit 4,000.00 into a savings account which earns 5% 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

Josiah and Rosanne deposit 4, 000.00 into a savings account which earns 5% 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 : 4643.02

Solution steps

Translate the problem into an equation:

A = 4000 (1 + \frac{0.05}{4})^{4 \cdot 3}

4000 (1 + \frac{0.05}{4})^{4 \cdot 3} = 4643.01807 \dots

Round to the nearest hundredth:

4643.02

Amount : 4643.02

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