Question

Brittany opened a savings account with an annual interest rate of 10% and an initial deposit of $7000. If her interest is compounded quarterly, how much is in Brittany’s account after 5 years? interest compounded quarterly: A = P (1 + )4t
A.
$3500.00

B.
$4470.32

C.
$11,273.57

D.
$11,470.32

Answer 1

A = 7000(1+0.1/4)4(5)
    = 7000(1.02500)²⁰
    = D
The answer is D.

Hope this helps :)

Answer 2

Initial Deposit = $7000

It means P= $7000

rate of interest = 10%

So , r = 0.10

compounded quarterly , so  n = 4

and we have to find the amount after 5 years , So t = 5

Now the formula we use here is

$A= P(1+\frac{r}{n} )^{nt}$

$A= 7000(1+\frac{0.10}{4} )^{(4)(5)}$

$A= 7000(1.025 )^{(20)}$

$A= 7000(1.63861644029)$

$A= 11470.315$

So amount after 5 years = $11470.315