6 years ago, Jordan won some money in the lottery and put it in a bank account that earns 14% interest compounded quarterly. If Jordan currently has 700.00 in the bank account, how much interest has he earned?

Solution

6 ye a rs a g o, J or d an 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 14% in t eres t co m p o u n d e d q u a r t er l y . I f J or d an c u rre n tl y ha s 700.00 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 : 393.43

Solution steps

Translate the problem into an equation:

700 = 306.56999 \dots + I

Solve for

I, 700 = 306.56999 \dots + I : I = 393.43

Interest : 393.43