Question

Aaron puts $1,000 in an account that pays 10% interest compounded quarterly. He leaves it in the account for six months. Estimate how much interest he earns.

A. $50
B. $100
C. $150
D. $200

Answer 1

I think its C or D... idk hope it helps tho

Answer 2

Answer: . $50

Explanation:

The formula to find the compound amount (compounded quarterly) is given by :-

`A=P(1+(r)/(4))^(4t)`, where P Is principal amount, r is the rate of interest in decimal and t is the time in years.

Given : Aaron puts $1,000 in an account that pays 10% interest compounded quarterly.

Then, P=1000, r=10%=0.1 ; t=
`(6)/(12)=0.5` year

Now,
`A=1000(1+(0.1)/(4))^(4(0.5))`

`A=1000(1.025)^(2)=1050.625`

Then , Compound interest=
`A-P=1050.625-1000=50.625\approx\$50`

Hence, he earns the estimated interest of $50.