document.write( "<A HREF=/cgi-bin/jump-to-question.mpl?question=894706>Question 894706</A>: <I><SPAN STYLE=\"word-break: break-all;\"> Lisa deposits $800 into an account that pays simple interest at a rate of 4% per year. How much interest will she be paid in the first 5 years? </SPAN>\n" );
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document.write( "A savings account earns 4% annual interest compounded quarterly. How much interest would $500 earn if it was invested for one year?<BR>\n" );
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document.write( "1 yr = 4 quarters<BR>\n" );
document.write( "4%/yer = 1% per quarter<BR>\n" );
document.write( "FV = PV*(1.01)^4<BR>\n" );
document.write( "FV = 500*(1.01)^4 = $520.30<BR>\n" );
document.write( "Interest = $20.30<BR>\n" );
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