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steve816
 one year ago
Ryan has a savings account that pays 4.5% interest annually compounded quarterly. She has not made any deposits or withdrawals for many years. Suppose that her current balance is $4,516.32. How much money was in her account 5 years ago?
steve816
 one year ago
Ryan has a savings account that pays 4.5% interest annually compounded quarterly. She has not made any deposits or withdrawals for many years. Suppose that her current balance is $4,516.32. How much money was in her account 5 years ago?

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arindameducationusc
 one year ago
Best ResponseYou've already chosen the best response.1Use compound interest formula

steve816
 one year ago
Best ResponseYou've already chosen the best response.0I always forget that formula xD

steve816
 one year ago
Best ResponseYou've already chosen the best response.0someone walk me through please!

dan815
 one year ago
Best ResponseYou've already chosen the best response.1this is why i think econ is so bs okay.. they say 4.5% annual interest compounded quarterly that in no way tells you that it means that every quarter the compound interest is 4.5/4 %

arindameducationusc
 one year ago
Best ResponseYou've already chosen the best response.1@steve816 you there?

dan815
 one year ago
Best ResponseYou've already chosen the best response.1now in 5 years that means the inital money was compounded 5*4 =20 times of 4.5/4%

dan815
 one year ago
Best ResponseYou've already chosen the best response.1let x be the money in the beginning x*(1+4.5/4%)^20=x*(1+0.045/4)^20=4,516.32 x*(1+0.045/4)^20=4,516.32 x=4,516.32/(1+0.045/4)^20

dan815
 one year ago
Best ResponseYou've already chosen the best response.1you can see why this formula comes about if you try do compound x one at a time (x*(1+r)) money after 1 compound (x*(1+r))*(1+r) = x*(1+r)^2 money after 2nd compound (x*(1+r))*(1+r)*(1+r)=x*(1+r)^3 money after 3rd compound and so on . . x*(1+r)^20 = money after 20 compounds
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