Question

A total of $12,000 is invested at an annual interest rate of 9%. Find the balance

Answer 1

Answer:

$18,726.11

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 lets change 9% into a decimal:

9% -> $\frac{9}{100}$ -> 0.09

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

$A=12,000(1+\frac{0.09}{4})^{4(5)}$

$A=18,726.11$

The balance after 5 years is $18,726.11