10 years ago, Aaron won some money in the lottery and put it in a bank account that earns 4% interest compounded quarterly. If Aaron currently has 300.00 in the bank account, how much interest has he earned?

Solution

10 ye a rs a g o, A a ro n w o n so m e m o n ey in t h e l o tt ery an d p u t i t in a bank a cco u n t t ha t e a r n s 4% in t eres t co m p o u n d e d q u a r t er l y . I f A a ro n c u rre n tl y ha s 300.00 in t h e bank a cco u n t, h o w m u c h in t eres t ha s h e e a r n e d ?

Interest : 98.5

Solution steps

Translate the problem into an equation:

300 = 201.49594 \dots + I

Solve for

I, 300 = 201.49594 \dots + I : I = 98.5

Interest : 98.5