Question

David put $1,000 into an account that yielded 1.3% interest, compounded quarterly. The money was left in the account for 20 years. How much is in the account when he withdraws it?

Answer 1

Based on the amount left in the account and the interest rate, the amount in the account after 20 years is $1,296.38.

Periodic Interest

You need to convert the interest from an annual interest rate to a quarterly one.

= 1.3% / 4

= 0.325%

Number of periods

= 20 years x 4

= 80 quarters

Amount after 20 years

= Amount x ( 1 + rate) ^ number of periods

= 1,000 x ( 1 + 0.325%)⁸⁰

= $1,296.38

In conclusion, the account would have $1,296.38.

Find out more about compound interest at brainly.com/question/25857644.