Dylan invested $7200 in an account paying in interest rate of 2.3% compounded quarterly assuming no deposit or withdrawals are made how much money to the nearest dollar will be in the account after 12 years
Mathematics · Middle School · Tue Nov 03 2020
Answered on
Given:
Principal Amount (P): $7200
Interest rate ( r ): 2.3% or 0.023
Compounded Quarterly (n): 4
Term (t): 12 years
Formula for computing the compound interest:
A = P (1 + r/n)^nt
Solution:
Substitute the given values of P, r,n and t to the formula for computing the compound interest.
A = P (1 + r/n)^nt
A = $7200 ( 1 + 0.023 / 4)^(4)(12)
A = $7200 ( 1 + 0.023 / 4)^(48)
A = $7200 (1.00575)^48
A= $7200 (1.316806555)
A = $9481
Final answer:
$9481