Question

1. Two thousand dollars is invested at 5.5 percent interest compounded

Answer 1

Two thousand dollars is invested at 5.5 percent interest compounded

quarterly for 2 years. Then the amount is $ 2230.88

Solution:

Given that Two thousand dollars is invested at 5.5 percent interest compounded  quarterly for 2 years

The formula for amount using compounded quarterly is given as:

$\text { Amount }=P\left(1+\frac{R / 4}{100}\right)^{4 T}$

Where, "p" is the principal sum

"R" is the rate of interest

"T" is the number of years

Here in this problem,

P = 2000 ; R = 5.5 ; T = 2 years

Plugging in values in formula we get,

$\text {Amount}=2000\left(1+\frac{\frac{5.5}{4}}{100}\right)^{4 \times 2}$

$=2000\left(1+\frac{1.375}{100}\right)^{8}$

On solving we get,

$=2000(1+0.01375)^{8}=2000(1.11544)=2230.88$

Hence the amount is $ 2230.88