Question

Mr. guny deposits $45,900 in savings account thar pays 1.5% interest compounded quarterly a. find the first quarter's interestb. find the first quarter's balance

Answer 1

Mr Guny deposits $45,900 in a savings account

Principal, P = $45,900

Annual rate, R = 1.5%

Time, t = 1 year since it is componded quarterly,

Interest rate, r will be

`\begin{gathered} r=(R)/(100) \\ \text{Where R}=1.5\text{\%} \\ r=(1.5)/(100)=0.015 \\ r=0.015 \end{gathered}`

a) To find the first quarter's interest,

`\begin{gathered} I=P((r)/(n)) \\ \text{Where P}=\text{\$45,900} \\ r=0.015\text{ and } \\ n=4 \end{gathered}`

Substitute the values into the above expression

`\begin{gathered} I=45900*(0.015)/(4)=(45900*3)/(800)=172.125 \\ I=\text{\$172.125} \end{gathered}`

Hence, the first quarter's interest is $172.125

b) The first quarter's balance, A, will be

`\begin{gathered} A=P+I \\ \text{Where } \\ P=\text{\$45900} \\ I=\text{\$172.125} \end{gathered}`

Substitute the values into the formula above

`\begin{gathered} A=P+I \\ A=45900+172.125=46072.125 \\ A=\text{\$}46072.125 \end{gathered}`

Hence, the first quarter's balance is $46,072.125