Question

Mark earned some money doing odd jobs last summer and put it in a savings account that earns 2% interest compounded quarterly. After 5 years, there is $300.00 in the account. How much did Mark earn doing odd jobs?

Answer 1

Here we will use the formula of compound interest which is as follows:

`A=P(1+(r)/(n))^(nt)`

Where,

A=amount

P=principal

r=rate of interest

n=number of times interest is compounded in a year

t=time

We are given,

r=2% or 0.02

t= 5 years

n =4( compounded quarterly)

A= $300

Let us plug these in the formula to find Principal

`300=P(1+(0.02)/(4))^(4*5)`

`300=P((4.02)/(4))^(4*5)`

`300=P(1.005)^(20)`

`300=P(1.105)`

Principal = $271.49

Answer: Mark earned $271.49 during odd jobs.