10 years ago, Lee won some money in the lottery and put it in a bank account that earns 5% interest compounded quarterly. If Lee currently has 300.00 in the bank account, how much interest has he earned?

Solution

10 ye a rs a g o, L ee 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 5% in t eres t co m p o u n d e d q u a r t er l y . I f L ee c u rre n tl y ha s 300.00 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 : 117.48

Solution steps

Translate the problem into an equation:

300 = 182.52400 \dots + I

Solve for

I, 300 = 182.52400 \dots + I : I = 117.48

Interest : 117.48