7 years ago, Tim won some money in the lottery and put it in a bank account that earns 15% interest compounded quarterly. If Tim currently has 400.00 in the bank account, how much interest has he earned?

Solution

7 ye a rs a g o, T im 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 15% in t eres t co m p o u n d e d q u a r t er l y . I f T im c u rre n tl y ha s 400.00 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 : 257.31

Solution steps

Translate the problem into an equation:

400 = \frac{4 ^{28} \cdot 5}{2.52497 E 15} + I

Solve for

I, 400 = \frac{4 ^{28} \cdot 5}{2.52497 E 15} + I : I = 257.31

Interest : 257.31