Question

Earl invested 6,000 in a money market account that pays 5% interest quarterly. How much money will he have in his account after 3 years?

Answer 1

Answer:

The amount becomes $6964.53 after 3 years .

Step-by-step explanation:

Formula

$Amount = P (1+\frac{r}{4})^{4t}$

Where P is the principle , r is the rate of interest in the decimal form and t is the time in the years .

As given

Earl invested 6,000 in a money market account that pays 5% interest quarterly for 3 years .

P = $6000

5% is written in the decimal form.

$= \frac{5}{100}$

= 0.05

r = 0.05

t = 3 years

Putting all the values in the formula

$Amount = 6000(1+\frac{0.05}{4})^{4\times 3}$

$Amount = 6000(1+0.0125)^{12}$

$Amount = 6000\times 1.16075452$

$Amount =\ 6964.53\ (Approx)$

Therefore the amount becomes $6964.53 after 3 years .