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

Answer:

Maureen earned $123.19 doing odd jobs

Step-by-step explanation:

The compound interest formula is given by:

$A(t) = P(1 + \frac{r}{n})^{nt}$

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.

$A(t) = P(1 + \frac{r}{n})^{nt}$

$300 = P(1 + \frac{0.09}{4})^{4*10}$

$(1.0225)^{40}P = 300$

$P = \frac{300}{(1.0225)^{40}}$

$P = 123.19$

Maureen earned $123.19 doing odd jobs