Question

Determine the balance is the account if you deposited $4000 at an interest rate of 3.4% compounded quarterly for three years

a.) $4428.90
b.) $4422.03
c.) $4427.62
d.) $4429.51

Answer 1

Option c.) $4427.62

Explanation:

we know that

The compound interest formula is equal to

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

where

A is the Final Investment Value

P is the Principal amount of money to be invested

r is the rate of interest in decimal

t is Number of Time Periods

n is the number of times interest is compounded per year

in this problem we have

`t=3\ years\\ P=\$4,000\\ r=3.4\%=3.4/100=0.034\\n=4`

substitute in the formula above

`A=4,000(1+(0.034)/(4))^(4*3)`

`A=4,000(1.0085)^(12)`

`A=\$4,427.62`