Question

What is the final amount of $70.00 that is put into a savings account with 16% interest rate for 25 years, if the interest is compounded 4 times per year?

Answer 1

PV × (1 + r/n)∧nt = FV
$70.00 × (1 + .16/4)∧4X25 = FV
$70.00 × (1 + .04)∧100 = FV
$70.00 × 50.50 = FV
$3535 =FV
The final amount is $3535

Answer 2

The final amount will be $3535.3

Explanation:

The formula for the compound interest is given by

`A=P\left ( 1+(r)/(n) \right )^(nt)`

we have been given that

P = $70.00

r = 0.16

t = 25

n = 4

On plugging these values in the above formula, we get

`A=70\left ( 1+(0.16)/(4) \right )^(4* 25)\\\\A=\$3535.3`

Thus, the final amount will be $3535.3