Question

1. Two thousand dollars is invested at 5.5 percent interest compounded

quarterly for 2 years. Find the amount.

Answer 1

Two thousand dollars is invested at 5.5 percent interest compounded

quarterly for 2 years. Then the amount is $ 2230.88

Solution:

Given that Two thousand dollars is invested at 5.5 percent interest compounded quarterly for 2 years

The formula for amount using compounded quarterly is given as:

`\text { Amount }=P\left(1+(R / 4)/(100)\right)^(4 T)`

Where, "p" is the principal sum

"R" is the rate of interest

"T" is the number of years

Here in this problem,

P = 2000 ; R = 5.5 ; T = 2 years

Plugging in values in formula we get,

`\text {Amount}=2000\left(1+((5.5)/(4))/(100)\right)^(4 * 2)`

`=2000\left(1+(1.375)/(100)\right)^(8)`

On solving we get,

`=2000(1+0.01375)^(8)=2000(1.11544)=2230.88`

Hence the amount is $ 2230.88