Question

Sandy invest $1500 into an account with 3.5% interest, compounded quarterly. How much money will be in the account after 8 years? Be sure to not round until the very end and then round to the nearest cent. I

Answer 1

Answer:

The amount of money that will be in the account after 8 years is $1513.13

Explanations:

Amount Invested is the Principal, P

P = $1500

Interest Rate, r = 3.5% = 3.5/100 = 0.035

The interest was compounded quarterly

There are 4 quarters in a year

That is, n = 44

The total number of years, t = 8

The amount formula for compound interest is:

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

To get the amount of money that will be in the account after 8 years, substitute r = 0.035, n = 4, and P = $1500 into the formula above:

`A\text{ = 1500(1 + }(0.035)/(4)_{})`

A = 1500( 1 + 0.00875)

A = 1500( 1.00875)

A = 1513. 13

Therefore, the amount of money that will be in the account after 8 years is $1513.13