Can someone please help me understand these problems?
1 answer:
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To solve this, we are going to use the compounded interest formula: 
where
is the final amount after 
years
is the initial investment
is the interest rate in decimal form
is the number of times the interest is compounded per year
is the time in years
We know from our problems that she needs $20,857 for a down payment on a house in 9 years, so
and 
. To convert the interest rate to decimal form, we are going to divide the rate by 100%
Since the interest is compounded quarterly, it is compounded 4 times per year; therefore,
.
Lets replace the values in our formula to find:
We can conclude that the correct answer is: <span>B. 17,633.17</span>
where
We know from our problems that she needs $20,857 for a down payment on a house in 9 years, so
Since the interest is compounded quarterly, it is compounded 4 times per year; therefore,
Lets replace the values in our formula to find
We can conclude that the correct answer is: <span>B. 17,633.17</span>