Question

you deposit 10000 into a bank account. the account pays 4 annual interest compounded quarterly. find the balance after 5 years.

Answer 1

Answer: 12,201.90 dollars

You may need to delete the comma if you are entering this result into a computer system.

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Work Shown:

P = 10,000 = deposit

r = 0.04 = decimal form of 4% interest rate

n = 4 = we're compounding 4 times a year

t = 5 years

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A = P*(1+r/n)^(n*t) .... compound interest formula

A = 10,000*(1+0.04/4)^(4*5)

A = 12,201.9003994797

A = 12,201.90

After 5 years, there is $12,201.90 in the account.

This is assuming you do not deposit any more money, and it also assumes that you don't take any money out during the 5 year timespan either.