Question

22. Find the balance in an account with $900 earning 6.5% compounded quarterly after 4 years

Answer 1

Answer:

$1,164.80

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, we need to change 6.5% into a decimal:

6.5% -> $\frac{6.5}{100}$ -> 0.065

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

$A=900(1+\frac{0.065}{4})^{4(4)}$

$A=1,164.80$

The balance after 4 years will be $1,164.80