CPM Homework Help : A2C Problem 6-35

Dana's mother gave her $$175$ on her sixteenth birthday. “But you must put it in the bank and leave it there until your eighteenth birthday,” she told Dana. Dana already had $$237.54$ in her account, which pays $3.25\%$ annual interest, compounded quarterly. What is the minimum amount of money she will have on her eighteenth birthday if she makes no withdrawals before then? Justify your answer.

Hint:

Notice that the interest is $3.25\%$ annually, but it is compounded quarterly.

Hint (2):

This means that you need to divide the percentage by $4$ , and multiply the number of compoundings by $4$ .

More Help:

$\text{So, }\textit{A}(\textit{x})=(237.54 + 175)\cdot(1+\frac{0.0325}{4})^{4\textit{t}}$

Answer:

$$440.13$