Wesley earned some money doing odd jobs last summer and put it in a savings account that earns 5% interest compounded quarterly. After 4 years, there is 800.00 in the account. How much did Wesley earn doing odd jobs?Round your answer to the nearest cent.

Solution

W es l ey e a r n e d so m e m o n ey d o in g o dd j o b s l a s t s u mm er 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 5% in t eres t co m p o u n d e d q u a r t er l y . A f t er 4 ye a rs, t h ere i s 800.00 in t h e a cco u n t . Ho w m u c h d i d W es l ey e a r n d o in g o dd j o b s ? R o u n d yo u r an s w er t o t h e n e a res t ce n t .

Principal : 655.8

Solution steps

Translate the problem into an equation:

800 = P (1 + \frac{0.05}{4})^{4 \cdot 4}

Solve for

P, 800 = P (1 + \frac{0.05}{4})^{4 \cdot 4} : P = 655.8

Principal : 655.8