Question

Meg invested $16,000 in a savings account. if the annual interest rate is 6%, how much will be in the account in 5 years for quarterly compounding? round your answer to two decimal places.

Answer 1

Meg invested $16,000 in a savings account. if the annual interest rate is 6%. In 5 years for quarterly compounding is $ 21,549.68.

What is interest rate?

• The amount of interest due each period expressed as a percentage of the amount lent, deposited, or borrowed is known as an interest rate (called the principal sum).
• The total interest on a loaned or borrowed sum is determined by the principal amount, the interest rate, the frequency of compounding, and the period of time the loan, deposit, or borrowing took place.
• The interest rate over a year is known as the annual interest rate.
• Other interest rates are applicable over shorter time frames, such a day or a month, but they are typically annualized.

What is saving account?

• An account in a retail bank is a savings account.
• Common characteristics include having a finite number of withdrawals allowed, not having check or connected debit card facilities, having few transfer choices, and not being able to become overdrawn.
• Savings account transactions were typically recorded in a passbook in the past, hence the term "passbook savings accounts," and bank statements were not typically supplied.
• Nowadays, same transactions are typically recorded electronically and are available online.

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