Question

$ 20,000 is invested at a rate of 5% compounded quarterly. Identify the compound interest function ta model the situation. Then find the balance after 5 years.

Answer 1

Answer:

the balance after 5 years is: 26540.744

Step-by-step explanation:

Given the information:

• P = initial balance  = $ 20,000
• r = interest rate (decimal)  = 5% = 0.05
• n = number of times compounded annually  = 4
• t = time  = 5

We have the compound interest function ta model the situation is:

$A=P(1+\frac{r}{n} )^{nt}$

<=> A = $20000(1+\frac{0.05}{4} )^{4*5}$

<=> A = $26540.744

Hence, the balance after 5 years is: $26540.744