Question

Find the balance in the account. $2,500 principal earning 4%, compounded quarterly, after 4 years

A. $40,000.00

B. $41,600.00

C. $2,924.65

D. $2,931.45

Answer 1

Hello there,

A(4) = 2500(1.01)^16
----
A(4) = 2500*1.1726
----
A(4) = $2931.45

Hope this helps!

Answer 2

The balance in the account is $2931.45 .

Option (D) is correct.

Explanation:

Formula

`Amount = P(1 +(r)/(4))^(4t)`

Where P is the principle , r s the rate of interest in the decimal form and t is the time in years .

As given

The account. $2,500 principal earning 4%, compounded quarterly, after 4 years.

P = $2500

4% is written in the decimal form

`= (4)/(100)`

= 0.04

r = 0.04

t = 4 yeas

Put all the values in the formula

`Amount = 2500(1 +(0.04)/(4))^(4* 4)`

`Amount = 2500(1 +(0.04)/(4))^(16)`

`Amount = 2500(1 +0.01)^(16)`

`Amount = 2500(1.01)^(16)`

`Amount = 2500* 1.17258`

Amount = $2931.45

Therefore the balance in the account is $2931.45 .

Option (D) is correct.