Question

Mr guny deposits $45900 in a savings account that pays 1.5% interest compounded quarterly. find the first quarter's interest find the first quarter's balance

Answer 1

If we use m compounded per year Bt will be to:

`\begin{gathered} B_t=B_0(1+(r)/(m))^(mt) \\ I_t=B_t-B_0 \end{gathered}`

Where:

B0 = deposits = $45900

r = compound yearly interest rate = 1.5% = 0.015

t = years

m = 4

The first quarter's interest

We have following:

`\begin{gathered} B_t=45900\cdot(1+(0.015)/(4))^{4\cdot(3)/(12)} \\ B_t=45900\cdot(1+(0.015)/(4))^1 \\ B_t=46072.13 \end{gathered}`

Then:

`I_{1th\text{ quarter}}=46072.125-45900=172.13`

Answer: The interest in first quarter is $172.13

The first quarter's balance

The balance is Bt, therefore:

Answer: The balance after first quarter is $46,072.13