Question

Caden deposited $4,251 into a savings account 15 years ago. The account has an interest rate of 3.4% and the balance is currently $7,063.91. How often does the interest compound?

Answer 1

\[7063.91=4251(1+\frac{0.034}{n})^{15n}\]
Now you need to solve for n which is the number of times the interest compounds in a year.

Answer 2

What would n be?

Answer 3

To find n you could try substituting 4 in the right hand side and calculate to see whether you get 7063.91. This value of n corresponds to quarterly compounding of interest.