Michael earned some Money doing odd jobs last summer and put it in a savings account that earns 13% interest compounded quarterly after 2 years there is 100.00 in the account How much did Michael earn doing odd jobs?
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13% interest compounded quarterly
after 2 years there is 100.00
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interest compounded
A = P(1 + r/n)^nt
A= Final amount
P= Principal Amount
r= interest
n= number of compounding periods (year)
t= time (year)
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Data
A= 100.00
P= Principal Amount (The question)
r= interest (0.13)
n= number of compounding periods (4)
t= time (2)
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Replacing
A = P(1 + r/n)nt
P = A / ((1 + r/n)^nt)
P = 100.00/ ((1 + 0.13/4)^4*5)
P= 100.00/ (1.0325^20)
P= 52
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Michael earns doing odd jobs 52 dollars.