SOLUTION: Heather is Holtz planning a vacation in europe in 4 years, after graduation. She estimates that she will need 3,500 for the trip. a. If her bank is offering 4- year certificate

Question 446300: Heather is Holtz planning a vacation in europe in 4 years, after graduation. She estimates that she will need 3,500 for the trip.
a. If her bank is offering 4- year certificates of deposit 8% interest compounded quarterly. How much Heather invested now to have the money for the trip?
b. how much compound interest will be earned on the investment?
Answer by mananth(16946) (Show Source): You can put this solution on YOUR website!
Principal P = x
Amount= 3500
years=n 4
compounded 4 times a year
Rate = 8.00
Amount = P*((n+r)/n)^n
3500 =x*(1+r/n)^n
3500 =P(1+0.080)/4)^4*4
3500=P(1.02000)^16
3500/(1.02)^16= P
P= 2549.56

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