Question

3. Gavin deposited $1500 into his savings account that is compounded quarterly at an interest rate of 1.5%. How much money will Gavin have after 5 years? Must show setup and answer for credit.

Answer 1

Answer:

$\ 1,616.60$  

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  

$t=5\ years\\ P=\ 1,500\\ r=1.5\%=1.5/100=0.015\\n=4$  

substitute in the formula above  

$A=1,500(1+\frac{0.015}{4})^{4*5}$  

$A=1,500(1.00375)^{20}$  

$A=\ 1,616.60$  

Answer 2

Answer:

 

we know that    

The compound interest formula is equal to  

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  

substitute in the formula above  

Step-by-step explanation: