Question

Find the balance in an account with $7,000 principal earning 5% interest compounded quarterly

Answer 1

Answer:

The balance is $\ 11,505.34$  

Step-by-step explanation:

we know that    

The compound interest formula is equal to  

$A=P(1+\frac{r}{n})^{nt}$  

where  

A is the Final Investment Value  

P is the Principal amount of money to be invested  

r is the rate of interest  in decimal

t is Number of Time Periods  

n is the number of times interest is compounded per year

in this problem we have  

$t=10\ years\\ P=\ 7,000\\ r=0.05\\n=4$  

substitute in the formula above  

$A=\ 7,000(1+\frac{0.05}{4})^{4*10}=\ 11,505.34$