Question

Valerie deposits $1,900 in an account that

earns 3% interest, compounded quarterly.
How much is in the account after six years?

Answer 1

$2273.19

General Formulas and Concepts:

Pre-Algebra

Order of Operations: BPEMDAS

1. Brackets
2. Parenthesis
3. Exponents
4. Multiplication
5. Division
6. Addition
7. Subtraction

• Left to Right

Algebra I

Compound Interest Rate Formula:
`\displaystyle A = P(1 + (r)/(n))^(nt)`

• A is final amount
• P is principle amount
• r is rate
• n is compound rate
• t is time (in years)

Explanation:

Step 1: Identify Variables

P = $1900

r = 3% = 0.03

n = 4

Step 2: Solve for A

1. Substitute [CIRF]:
   `\displaystyle A = 1900(1 + (0.03)/(4))^(4(6))`
2. (Parenthesis) Divide:
   `\displaystyle A = 1900(1 + 0.0075)^(4(6))`
3. (Parenthesis) Add:
   `\displaystyle A = 1900(1.0075)^(4(6))`
4. (Exponents) Multiply:
   `\displaystyle A = 1900(1.0075)^(24)`
5. Exponents:
   `\displaystyle A = 1900(1.19641)`
6. Multiply:
   `\displaystyle A = 2273.19`