Question

You deposit $3000 into a money-market savings account which pays 4.8% compounded quarterly, and you make no withdrawals from or further deposits into this account for 3 years. How much money is in your account at the end of those 3 years?
Give answer in dollars rounded to the nearest cent. Do NOT enter "$" sign in answer.

Answer 1

Answer:

$5265.71

Step-by-step explanation:

We have been given that you deposit $3000 into a money-market savings account which pays 4.8% compounded quarterly.

We will use future value formula to solve our given problem.

$FV=C_0\times (1+r)^n$, where,

$C_0=\text{Initial amount}$,

r = Rate of return in decimal form,

n = Number of periods.

$4.8\%=\frac{4.8}{100}=0.048$

$n=3\times 4=12$

$FV=\ 3,000\times (1+0.048)^{12}$

$FV=\ 3,000\times (1.048)^{12}$

$FV=\ 3,000\times 1.7552354909370114$

$FV=\ 5265.7064\approx \ 5265.71$

Therefore, there will be $5265.71 in your account at the end of those 3 years.