Jesse deposits $3,500 account earning 5% simple interest . Fine the amount of interest earned and the total value of the account
1 answer:
You might be interested in
Answer:
a) amount in the bank after 7 years if interest is compounded quarterly is $6,605
b) amount in the bank after 7 years if interest is compounded quarterly is $6,612.57
Step-by-step explanation:
We are given:
Principal Amount P= 5000
Rate r= 4% = 0.04
time t = 7 years
The formula used is:
where A is future value, P is principal amount, r is rate, n is compounded value and t is time
a) Find the amount in the bank after 7 years if interest is compounded quarterly?
If interest is compounded quarterly then n = 4
Using values given in question and finding A
So, amount in the bank after 7 years if interest is compounded quarterly is $6,605
b) Find the amount in the bank after 7 years if interest is compounded monthly?
If interest is compounded quarterly then n = 12
Using values given in question and finding A
So, amount in the bank after 7 years if interest is compounded quarterly is $6,612.57