Question

What is the final amount of $105.00 that is put into a savings account with 8% interest rate for 25 years, if the interest is compounded 4 times per year?

Answer 1

A=105×(1+0.08÷4)^(4×25)
A=760.68

Answer 2

Answer:

Given: The principal amount (P) = $ 105.00, rate of interest(r) = 8% and t= 25 years and number of times interest compounded per year (n) =4.

Use formula to find the final amount i.e,

$A =P(1+\frac{r}{100n})^{nt}$ ......[1] ; where r is the rate of interest , n is the number of times interest compounded per year and P is the Principal.

Now, substitute the given values of P , r, n and t in [1] we get;

$A = 105 \times (1+\frac{8}{100 \times 4})^{4\times 25}$

or

$A =105 \times (1+\frac{8}{400})^{100}$

Simplify:

A = $ 760.687842416

therefore, the final amount is $ 760.68 (approx.)