Question

Maureen earned some money doing odd jobs last summer and put it in a savings account that earns 9% interest compounded quarterly. After 10 years, there is $300.00 in the account. How much did Maureen earn doing odd jobs?

Answer 1

Maureen earned $123.19 doing odd jobs

Explanation:

The compound interest formula is given by:

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

Where A(t) is the amount of money after t years, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit year and t is the time in years for which the money is invested or borrowed.

In this question:

Compounded quarterly means that
`n = 4`

10 years, so
`t = 10`

9% interest, so
`r = 0.09`

There is $300.00 in the account, which means that
`A = 300`

How much did Maureen earn doing odd jobs?

This is P.

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

`300 = P(1 + (0.09)/(4))^(4*10)`

`(1.0225)^(40)P = 300`

`P = (300)/((1.0225)^(40))`

`P = 123.19`

Maureen earned $123.19 doing odd jobs