Nathan invested 3,500 in an account paying an interest rate of 3.5% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest hundred dollars, would be in the account after 19 years?

Solution

N a t han in v es t e d 3, 500 in an a cco u n t p a y in g an in t eres t r a t e o f 3.5% co m p o u n d e d q u a r t er l y . A ss u min g n o d e p os i t s or w i t h d r a w a l s a re ma d e, h o w m u c h m o n ey, t o t h e n e a res t h u n d re d d o ll a rs, w o u l d b e in t h e a cco u n t a f t er 19 ye a rs ?

Amount : 6786.06

Solution steps

Translate the problem into an equation:

A = 3500 (1 + \frac{0.035}{4})^{4 \cdot 19}

3500 (1 + \frac{0.035}{4})^{4 \cdot 19} = 6786.05963 \dots

Round to the nearest hundredth:

6786.06

Amount : 6786.06