Question

You deposit $4200 in a savings account that has a rate of 4%. The interest is compounded quarterly. How much money will you have after 10 years

Answer 1

`\$6,253.23`

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=10\ years\\ P=\$4,200\\ r=0.04\\n=4`

substitute in the formula above

`A=\$4,200(1+(0.04)/(4))^(4*10)=\$6,253.23`