Question

Dana opened a savings account and deposited 300.00 as principal the account earns 5%interest compounded quarterly what is the balance after 2 years

Answer 1

EXPLANATION

Let's see the facts:

-Dana deposit = $300

-Interest rate = 5%

-Compounding period = quarterly

-Number of years = 2

The Compounding formula will be:

`\text{Compounded amount = P(1+}(r)/(n))^(nt)`

P= 300

r=5%=0.05 (In decimal form)

n= quarterly = 4

t = 2 years

Replacing values in the equation will give us:

`\text{Compounded amount = 300(1+}(0.05)/(4))^(4\cdot2)`
`\text{Compounded amount = 300(1.0125)}^8`
`\text{Compounded amount = }331.34`

Answer: Dana will have $331.34 after two years.