SOLUTION: Giac collected money in his piggy bank until he was 10 years old. On his birthday, he deposited all $213.45 in the bank. His account earned 9% interest, compounded quarterly. On hi

Question 1099890: Giac collected money in his piggy bank until he was 10 years old. On his birthday, he deposited all $213.45 in the bank. His account earned 9% interest, compounded quarterly. On his 18th birthday, Giac took all of his money out to help buy a car. How much money was in the account at that time?
This is an applied problem using the rate of growth.
Answer by Theo(13342) (Show Source): You can put this solution on YOUR website!
on his 10th birthday, he deposited 213.45 in the bank.
his account earned 9% per year compounded quarterly.
on his 18th birthday, he took the money out to help buy a car.

his money was in the bank for 8 years.

9% per year is equal to 9/100 per year = .09 per year.

time periods are in months because the interest rate is compounded monthly, therefore:

interest rate per month = .09/12 = .0075 per month.
number of months = 8 * 12 = 96 months.

formula is f = p * (1+r)^n

f is the future value
p is the present value = 213.45
r is the interest rate per month = .0075 per month.
n is the number of months = 96 months.

formula becomes:

f = 213.45 * (1.0075)^96

solve for f to get f = 437.3422362.

round to 2 decimal places to get f = $437.34.

you can use your calculator to confirm this is true, based on the future value of a present amount formula shown above.

there are other financial formulas you might find useful along with a reference to a financial calculator that should be helpful to confirm you did the problems correctly.

they're contained in the following reference.

https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes

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