Question

Porsha calculates the amount of money she will have at the end of 6 years on a $5,000 investment earning 3.75% interest compounded quarterly. She writes the following expression:5,000(1+0.0375)

Answer 1

The formula for annual compound interest is A = P (1 + r/n) ^ nt:

Where:

A = the future value of the investment/loan, including interest
P = the principal investment amount (the initial deposit or loan amount)
r = the annual interest rate (decimal)
n = the number of times that interest is compounded per year
t = the number of years the money is invested or borrowed for

A = P (1 + r/n) ^ nt

A= 5000(1+0.0375/4)^4*6

A= 5000(1+0.0375/4)^24

A=$6255.05 (future Value)

Answer 2

It is B. Porsha's expression should have 1 + 0.009375 in the parentheses.

Explanation:

I got it in the test