Brooke earned 10,000.00 from a summer job and put it in a savings account that earns 15% interest compounded quarterly. When Brooke started college, she had 34,669.00 in the account which she used to pay for tuition. How long was the money in the account?

Solution

B roo k 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 15% in t eres t co m p o u n d e d q u a r t er l y . Wh e n B roo k e s t a r t e d co ll e g e, s h e ha d 34, 669.00 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 ?

Time : 1.72

Solution steps

Translate the problem into an equation:

44669 = 34669 (1 + \frac{0.15}{4})^{4 t}

Solve for

t, 44669 = 34669 (1 + \frac{0.15}{4})^{4 t} : t = 1.72

Time : 1.72