Question

Mandy opened a savings account and deposited 100.00 as principal the account earns 15%interest compounded quarterly how much will she earn after 5 years

Answer 1

We can solve this by means of the compound interest formula:

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

Where A is the amount of money saved after a time t, r is the rate of interest in decimal, n is the number of times interest is compounded per year and P is the initial amount deposited in the account.

From the statement of the question we know:

P = $100

r = 0.15

n = 4

t = 5 years

we can replace these values into the above formula, to get:

`A=100(1+(0.15)/(4))^(4*5)=208.81`

Then, after 5 years she will have saved $208.81, subtracting the initial amount of money deposited we get the money earned, like this:

money earned = $208.81 - $100 = $108.81

Then, Mandy earns $108.81 after 5 years.