How much interest did she earn? (compound interest)
Total Interest of 4 years is:
Annual compound interest is 10%
Calculation cycle: 4 times a year.
Final sum in account: $600.00 after 4 years.
Let the initial unknown principle sum be
Let the total interest in dollars be
Let the count of years be
As the is a cycle of 4 calculations per year we have the indices of
This is over 4 years so
Thus the interest is the difference.
Compound interest is given by the formula:
We are give interest rate of
compounding period is quarterly so,
Time period is 4 years so:
To find the amount of interest earned, we first need to find the present value:
Interest earned is: