Henry invested 59,000 in an account paying an interest rate of 2% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 20 years?

Solution

Henry invested 59, 000 in an account paying an interest rate of 2% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 20 years?

Solution

Amount : 87929.98

Solution steps

Translate the problem into an equation:

A = 59000 (1 + \frac{0.02}{4})^{4 \cdot 20}

59000 (1 + \frac{0.02}{4})^{4 \cdot 20} = 87929.97550 \dots

Round to the nearest hundredth:

87929.98

Amount : 87929.98

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