Question

Find the total amount Suzanne has in a college savings account if $5000 was invested and earned 3% compounded quarterly for six years. Write the answer rounded to the nearest cent. (Three Points)

Answer 1

Answer:

$A = 598207\ cents$

Explanation:

Given

$Principal, P = \ 5000$

$Rate, r = 3\%$

$Time, t = 6\ years$

$n = Quarterly =4$

Required

Determine the total amount

This can be calculated by using:

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

Substitute $P = \ 5000$    $r = 3\%$    $t = 6\ years$     $n =4$

So;

$A = 5000 * (1 + \frac{3\%}{4})^{4* 6}$

Convert percentage to decimal

$A = 5000 * (1 + \frac{0.03}{4})^{4* 6}$

$A = 5000 * (1 + 0.0075)^{4* 6}$

$A = 5000 * (1.0075)^{4* 6}$

$A = 5000 * (1.0075)^{24}$

$A = 5000 * 1.19641352939$

$A = 5982.06764695$

Since 1 dollar is equivalent to cents, then the above in cents is;

$A = 5982.06764695 * 100$

$A = 598206.764695$

$A = 598207\ cents$ --- Approximated