3 years ago, Britney won some money in the lottery and put it in a bank account that earns 4% interest compounded quarterly. If Britney currently has 500.00 in the bank account, how much interest has she earned?

Solution

3 ye a rs a g o, B r i t n ey 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 4% in t eres t co m p o u n d e d q u a r t er l y . I f B r i t n ey c u rre n tl y ha s 500.00 in t h e bank a cco u n t, h o w m u c h in t eres t ha s s h e e a r n e d ?

Interest : 56.28

Solution steps

Translate the problem into an equation:

500 = 443.72461 \dots + I

Solve for

I, 500 = 443.72461 \dots + I : I = 56.28

Interest : 56.28