Respuesta :
To solve this problem we need to use the compound interest formula:
[tex]A=P(1+\frac{r}{n})^{nt}[/tex]Where P is the initial deposit:
[tex]P=700[/tex]r is the interest rate in decimal form, since the interest rate is 11%, in the decimal form we have:
[tex]r=0.11[/tex]n is the number of times that the interest is compounded in a year, in this case, it is compounded quarterly, and since there are 3 quarters in a year, the interest will be compounded 3 times per year:
[tex]n=3[/tex]and t is the total time, in this case, 3 years:
[tex]t=3[/tex]Substituting all of these values into the formula to find the Amount "A" they will have after 3 years:
[tex]A=700(1+\frac{0.11}{3})^{3\cdot3}[/tex]Solving the operations:
[tex]A=700(1+0.03666)^9[/tex][tex]A=700(1.03666)^9[/tex][tex]A=700(1.382777)[/tex][tex]A=967.944[/tex]Answer: They will have $967.944 to spend
