Question

Stan savings account has a balance of $4706. After 4 years what will the amount of interest be at 4% compounded quarterly?

Answer 1

The amount = $5518

Explanation:

Formula: compound interest

A = P[1 + r/4]^4N

A - amount

P - Principle amount

r - rate of interest

N - Number of years

It is given that, Stan savings account has a balance of $4706.

To find amount of interest

Here P = $4706

r = 4%

N = 4 years

A = P[1 + r/4]^4N

A = 4706[1 + .04/4]^4*4

A = 4706*1.17 = 5518

Therefore the amount = $5518

Answer 2

Final amount after 4 years will be $5518.

Explanation:

From the given question Principal amount in the account of Stan = $4706

and we have to calculate amount after 4 years with 4% interest compounded quarterly.

Formula will be final amount
`A=A'(1+(r)/(n))^(nt)`

Here A' = $4706

t = 4 years

n = number of times compounded = quarterly that will be 4

r = .04

`A=4706(1+(.04)/(4))^(4* 4)=4706(1+.01)^(16)`

`A=4706(1.01)^(16)=4706* 1.17=$5518`

So the final amount after four years will be $5518.