Question

If $4,000 is deposited in a bank account paying 4% compounded quarterly, what amount will be in the account after 7 years? How much interest will be returned during the 7 years?

Answer 1

We shall use the equation A = i(1 + r/n)^nt
So we shall plug all of that in so it turns out like this:
A = 4000(1 + 0.04/4)^4 x 7

So then that can be simplified to A = (1.01)^28
and then to A = 4000(1.321)
so then A = 5285.16