Question

Trent and Jen deposit 1,000.00 into a savings account which earns 12%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

Answer 1

the interest compound formula is given by

`\begin{gathered} A=P(1+(r)/(n))^(n\cdot t) \\ \text{where n=4 in this case since we are dealing with quarterly interest.} \end{gathered}`
`\begin{gathered} By\text{ substituying values, we have} \\ A=1000(1+(0.12)/(4))^(4\cdot3) \\ \text{where t=3.} \end{gathered}`

remeber that, the Principal P=1000 and the rate r=0.12. Hence,

`\begin{gathered} A=1000(1.426) \\ A=1425.76 \end{gathered}`

Therefore, Jen will able to spend 1425.76 dollars