An investment of $2000.00 is earning interest at the rate of 6.2% compounded quarterly over 5 years. Approximately how much interest is earned on the investment?

$720.37

Step-by-step explanation:

To solve this problem, we can use the compound interest formula:

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 6.2% into a decimal:

6.2% -> -> 0.062

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

To find the interest earned, just subtract the principal of 2,000 from 2,720.37:

The interest earned is $720.37

Since we want to solve for the variable x, we want to isolate x

a²x + (a - 1) = (a + 1)x ⇒ Distribute x to (a+1). Also, remove parentheses

a²x + a - 1 = ax + x ⇒ Subtract a from both sides

a²x - 1 = ax + x - a ⇒ Add 1 to both sides

a²x = ax + x - a + 1 ⇒ Subtract (ax + x) from both sides

a²x - (ax + x)= ax + x - a + 1 - (ax+x) ⇒ Simplify. Remember that multiplying positive by negative = negative

a²x - ax - x = ax + x - a + 1 - ax - x ⇒ Simplify

a²x - ax - x = -a + 1 ⇒ Factor out the x from a²x - ax - x

x(a² - a - 1) = -a + 1 ⇒ Divide both sides by (a² - a - 1)

x = (-a + 1) / (a² - a - 1)

However, we need to make sure that the denominator does not equal 0. Therefore, you set the denominator = 0 (just use the quadratic formula for this), and it gives that the denominator =0 when a = (1+√5)/2 AND (1-√5)/2

Therefore, the final answer is

x = (-a + 1) / (a² - a - 1) given that a ≠ (1+√5)/2, a ≠ (1-√5)/2