Question

1.

Find the compound amount. Round to the nearest cent.

Amount: $10,500
Rate: 6%
Compounded: quarterly
Time (Years): 5


A.)$14,142.03

B.)$14,051.42

C.)$11,311.44

D.)$11,287.50

Answer 1

Principal Amount = P = $10,500
Interest rate = r= 6% = 0.06
Time in years = t = 5
Compounding periods in a year = n = 4
Compounded Amount = A = ?

The formula for compound interest is:


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

Using the values, we get:


`A=10500(1+ (0.06)/(4))^(4*5)=14141.98`

Option A gives the most closest value and hence is the correct answer.