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Kyle invested $15,000 in a savings account. if the annual interest rate is 5%, how much will be in the account in 10 years for quarterly compounding? round your answer to two decimal places.

User Leonardo Eloy
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1 Answer

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24 votes

Final answer:

To calculate the amount of money in the account after 10 years with quarterly compounding, we use the formula A = P(1 + r/n)^(nt), where P is the principal amount, r is the annual interest rate, t is the number of years, and n is the number of times the interest is compounded per year. Plugging in the given values, the amount in the account after 10 years is approximately $24,654.28.

Step-by-step explanation:

To calculate the amount of money in the account after 10 years with quarterly compounding, we can use the formula:

A = P(1 + r/n)^(nt)

Where:

A = the amount of money in the account after t years

P = the principal amount invested ($15,000 in this case)

r = annual interest rate (5% in this case)

t = number of years (10 in this case)

n = number of times the interest is compounded per year (4 for quarterly compounding)

Plugging in the given values, we get:

A = 15000(1 + 0.05/4)^(4*10)

A = 15000(1.0125)^(40)

A ≈ 15000(1.6436184)

A ≈ $24,654.28

User Ayman Hourieh
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