Question

What is the final amount of $70.00 that is put into a savings account with 16% interest rate for 25 years, if the interest is compounded 4 times per year?

Answer 1

Answer:

The final amount will be $3535.3

Step-by-step explanation:

The formula for the compound interest is given by

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

we have been given that

P =  $70.00

r = 0.16

t = 25

n = 4

On plugging these values in the above formula, we get

$A=70\left ( 1+\frac{0.16}{4} \right )^{4\times 25}\\\\A=\ 3535.3$

Thus, the final amount will be $3535.3

Answer 2

PV × (1 + r/n)∧nt = FV
 $70.00 × (1 + .16/4)∧4X25 = FV
$70.00 × (1 + .04)∧100 = FV
$70.00 × 50.50 = FV
 $3535 =FV
The final amount is $3535