Jaxon invested 58,000 in an account paying an interest rate of 2.7% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 14 years?

Solution

J a x o n in v es t e d 58, 000 in an a cco u n t p a y in g an in t eres t r a t e o f 2.7% 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 d o ll a r, w o u l d b e in t h e a cco u n t a f t er 14 ye a rs ?

Amount : 84535.62

Solution steps

Translate the problem into an equation:

A = 58000 (1 + \frac{0.027}{4})^{4 \cdot 14}

58000 (1 + \frac{0.027}{4})^{4 \cdot 14} = 84535.61902 \dots

Round to the nearest hundredth:

84535.62

Amount : 84535.62