Question

3. Gavin deposited $1500 into his savings account that is compounded quarterly at an interest rate of 1.5%. How much money will Gavin have after 5 years? Must show setup and answer for credit.

Answer 1

Gavin will have amount of $ 1528.335 in her account after 5 years

Explanation:

Given as :

The principal amount deposited in account = $1500

The rate of interest compounded quarterly = 1.5 %

The time period = 5 years

Let The Amount after 5 years = A

From Compounded Interest method :

Amount = Principal ×
`(1+(\textrm Rate)/(4* 100))^(\textrm 4* Time)`

Or, A = $1500 ×
`(1+(\textrm 1.5)/(4* 100))^(\textrm 4* 5)`

Or, A = $1500 ×
`(1.00375)^(20)`

Or, A = $1500 × 1.01889

∴ A = $ 1528.335

Hence Gavin will have amount of $ 1528.335 in her account after 5 years Answer