Question

Justin invested $23,000 in an account paying an interest rate of 3.8% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest dollar, would be in the account after 14 years?

Answer 1

$39056

Explanation:

As we know, the final Amount can be calculated with the formula for compound interest,

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

where,

A = Final Amount

P = Initial principal amount

r = rate of interest in decimal

n = number of times applied per time period

t = total time period

Now, according to the given data,

P = $23000

r = .038

n = 4

t = 14

so,

`A = 23000(1 + (.038)/(4) )^(4(14))`

A = 39055.476