Question

Malik fulton savings account has a principal of $1640. It earns 6% interest compounded quarterly. What is the amount at the end of the second quarter?

Answer 1

Amount at the end of second quarter is, $1689.569

Explanation:

Given: Principal(P) = $1640 , Rate(r) = 6% = 0.06

Formula to find the Amount:

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

where

P represent the principal

r represents the annual rate (in decimals)

n represents the number of times compounded per year

and t is the time in year.

Here, n = 4 , P= $1640 and r = 0.06

Amount(A) =
`1640(1+(0.06)/(4))^(4t)`

where 4t represents the number of quarter

We have to find the Amount at the end of the second quarter.

substitute 4t = 2 (number of quarter is 2)

then;

`A=1640(1+(0.06)/(4))^2`

or

`A=1640(1+0.015)^2`

or

`A=1640(1.015)^2`

Simplify:

A = $ 1689.569

therefore, the amount at the end of second quarter is, $1689.569