Question

an initial investment of $480 earns interezt for 7 years in an account that earns 13% interest, compounded quarterly. Find the amount of money in the account at the end of the 7 year period

Answer 1

Answer:

$1,175.34

Step-by-step explanation:

To solve for the total amount after 7 years. We need to use the formula:

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

Let's first break down all the variables that we have.

P = 480

r = 13% or 0.13

n = 4 (Quarterly)

t = 7 years

Now we simply substitute the values into the formula.

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

$A = 480(1+\dfrac{0.13}{4})^{4(7)}$

$A = 480(1+\dfrac{0.13}{4})^{28}$

$A = 480(1+0.0325)^{28}$

$A = 480(1.0325)^{28}$

$A = 480(2.45)$

$A = 1,175.34$

The account will have $1,175.34 after the 7 year period.