Question

An account is opened with an initial deposit of \$3,000 and earns 4.1\% interest compounded quarterly What the account worth in 2 years?

Answer 1

Answer:

After 2 years the account worth will be $3225

Step-by-step explanation:

Initial Deposit (Principal Amount P) = $3000

Rate r = 4.1% = 0.041

Compounded quarterly = n = 4

Time t = 2 years

We need to find future value A

The formula used is: $A=P(1+\frac{r}{n})^{nt}$

Putting values in formula and calculating A

$A=P(1+\frac{r}{n})^{nt}\\A=3000(1+\frac{0.041}{4})^{4*2} \\A=3000(1+0.01025)^{8} \\A=3000(1.01025)^8\\A=3000(1.085)\\A=3225$

So, After 2 years the account worth will be $3225