Question 1099890
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.


<a href = "https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes" target = "_blank">https://www.algebra.com/algebra/homework/Finance/THEO-2016-04-29.lesson#notes</a>