Charlotte earned 10,000.00 from a summer job and put it in a savings account that earns 9% interest compounded quarterly. When Charlotte started college, she had 11,668.00 in the account which she used to pay for tuition. How long was the money in the account?Round your answer to the nearest month.

Solution

C ha r l o tt e e a r n e d 10, 000.00 f ro m a s u mm er j o b an d p u t i t in a s a v in g s a cco u n t t ha t e a r n s 9% in t eres t co m p o u n d e d q u a r t er l y . Wh e n C ha r l o tt e s t a r t e d co ll e g e, s h e ha d 11, 668.00 in t h e a cco u n t w hi c h s h e u se d t o p a y f or t u i t i o n . Ho w l o n g w a s t h e m o n ey in t h e a cco u n t ? R o u n d yo u r an s w er t o t h e n e a res t m o n t h .

Time : 6.95

Solution steps

Translate the problem into an equation:

21668 = 11668 (1 + \frac{0.09}{4})^{4 t}

Solve for

t, 21668 = 11668 (1 + \frac{0.09}{4})^{4 t} : t = 6.95

Time : 6.95