Question

Liz deposited money into an account in which interest is compounded quarterly at a rate of 3.2%. How much did she deposit if the total amount in her account after 5 years was $4837.65, and she made no other deposits or withdraws. SHOW WORK

You invest $5125 into a fund that is expected to earn 4.75% per year. How long will it take the fund to be worth $10,250. round to the tenths SHOW WORK

Beth's insurance company pays for 75% of the cost of her MRI, after she pays a $100 deductible. How much will Beth pay for her MRI if it costs $1218. SHOW WORK

Answer 1

$4125.00

14.94 years

$379.50

Explanation:

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

4837.65 = P(1 + 0.032/4)^(4×5)

4837.65 = P(1.008)^(20)

P = 4125.00

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

10250 = 5125(1 + 0.0475/1)^(1×t)

10250 = 5125(1.0475)^t

2 = 1.0475^t

ln 2 = t ln 1.0475

t = 14.94

3. Beth pays the first $100, bringing the cost to $1118. She then pays 25% of this, which is $279.50. So she pays a total of $379.50.