Question

Bob earned some money doing odd jobs last summer and put it in a savings account that

earns 1% interest compounded quarterly. After 10 years, there is $1,000.00 in the account.
How much did Bob earn doing odd jobs?
Round your answer to the nearest cent.
What is the initial amount

Answer 1

714.29$

Explanation:

1% interest/quarter * 10 years * 4 quarters/year = 40% interest accumulated over the 10 years

We gotta define the initial amount Bob earned as 100%. That means he now has 140% (because incl. 10 years interests).

Now we get the equation

140% of the initial amount he earned = 1k$

140% = 1k$

We want to know 100% (his initial earnings), so we do "rule of three"

140% = 1k$ | divide by 140 to get 1%

1% = 1k$/140 | multiply with 100 to get 100%

100% = 1k$/140*100

100% = 714.285714285 $

100% ≈ 714.29 $