Gabrielle inherited some money from her grandfather and put it in a bank account that earns 2% interest compounded quarterly. After 8 years, Gabrielle had 500.00 in the bank account. How much interest did she earn?

Solution

G ab r i e ll e inh er i t e d so m e m o n ey f ro m h er g r an df a t h er an d p u t i t in a bank a cco u n t t ha t e a r n s 2% 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 8 ye a rs, G ab r i e ll e ha d 500.00 in t h e bank a cco u n t . Ho w m u c h in t eres t d i d s h e e a r n ?

Interest : 73.76

Solution steps

Translate the problem into an equation:

500 = 426.24179 \dots + I

Solve for

I, 500 = 426.24179 \dots + I : I = 73.76

Interest : 73.76