Question

A savings account earns 8% interest each year, compounded quarterly (4 times a year). If a person invests $100 and makes no further deposits or withdrawals, what is the balance in the account after 3 years?

Answer 1

251.817012

Explanation:

1. Write out equation to get 100(1.08)^n*4

2. Use 3 for n

3. Simplify to get 100(1.08)^12

4. Solve to get 251.817012