Question

Can somebody help me with number 1 ? I don’t understand

Answer 1

(1) From here we are told to use the formula

`\begin{gathered} A(t)=A_o(1+(r)/(n))^(nt) \\ Where\text{ } \\ A_o=money\text{ invested = 2,000 dollars} \\ r=interest\text{ rate = 4.3\%= }(4.3)/(100)=\text{ 0.043} \\ n=number\text{ of compounding, quarterly = 4} \\ t=time\text{ in years = 5years } \end{gathered}`

Plugging the values into the formula, we have

`\begin{gathered} A(t)=A_o(1+(r)/(n))^(nt) \\ A(t)=2,000(1+(0.043)/(4))^(4*5) \\ A(t)=2,000(1+0.01075)^(20) \\ =2000(1.01075)^(20) \\ =2000*1.23844 \\ =2476.880168 \\ =2476.88\text{ dollars } \end{gathered}`

Hence the answer is $2476.88