Question

Tony wants to put $318,000 in his retirement savings account. It earns an interest rate of 7.1% compounded quarterly. He wants to determine how much he will have in the account after 5 years, even if he makes no additional contributions or withdrawals to the account
A. $448099.52
B. $347242.34
C. $452115.44
D. $341186.28
which answer correct

Answer 1

Answer:

C. $452115.44

Step-by-step explanation:

To solve this, we will follow the steps below;

first write down the formula for  compound interest

A= P [ 1 + $\frac{r}{n}$]^nt

where A is the ending amount

P represent the principal

r represent the interest rate

n represent the number of compounding a year

t represent the time {in years)

from he question above

p= $318 000

r = 0.071

n = 4  since is quarterly

t= 5

we can now proceed to insert the values into the formula

A= P [ 1 + $\frac{r}{n}$]^nt

  =318 000 [1+$\frac{0.071}{4}$] ^4(5)

  = $318 000 [1+$\frac{0.071}{4}$] ^20

   =$318 000 [1+0.01775] ^20

    = $318 000 [1.01775] ^20

     =$318 000× 1.421747

      ≈$452 115.44

He will have $452 115.44 in the account