Question

gavin deposited $1500 into his savings account that is compounded quarterly at an interest rate of 1.5%. How munch money will gavin have after 5 years?

Answer 1

Step-by-step explanation:

The money will gavin have after 5 years is 1616.59$

Answer 2

The money will gavin have after 5 years is 1616.59$

Step-by-step explanation:

We know that compound interest is given by

`A=P\left(1+(r)/(n)\right)^(n t)`

Where A = final amount

P = Principal amount = $1500 (given)

r = interest rate = 1.5% = 0.015

n = no. of times interest applied per time period = given quarterly = 4

t = time period = 5 years

So,

`A=1500\left(1+(0.015)/(4)\right)^(4 * 5)`

`1500\left(1+(0.015)/(4)\right)^(20)`

= 1616.59$ which is the money will gavin have after 5 years