Question

Tatiana is thinking about putting $200 in a savings account that earns 4% interest compounded quarterly. She wants to keep that money in the account for 4 years. Which of the formulas below can help her calculate how much money she will have at the end of the 4 years? A. $200(1 + 0.16)1 B. $200(1 + 0.04)4 C. $200(1 + 0.01)16 D. $200(1 + 0.02)8

Answer 1

Total = 200 * (1 + .04 / 4) ^ 4*4
Total = 200 * (1 + .01) ^ 16
The answer is C

Answer 2

C.
`200(1+0.01)^(16)`

Explanation:

We are given that,

Initial investment, P = $200

Rate of interest, r = 4% = 0.04

Time period, t = 4

It is required to find the formula for the money which is compounded quarterly.

The compound interest is given by
`A=P(1+(r)/(n))^(nt)`

Substituting the value, we have,

`A=200(1+(0.04)/(4))^(4* 4)`

i.e.
`A=200(1+0.01)^(16)`

Hence, the formula for the money after 4 years is
`200(1+0.01)^(16)`.