Question

You deposited $2000 in am account that pays 6% interest compounded quarterly. How much money is in your account after one year?

Answer 1

We need to find the amount A in the account after a deposit P = 2000 dollars, with an interest rate r = 6% = 0.06 compounded quarterly (n = 4), stays there for t = 1 year.

The formula relating those quantities is:

`A=P\left(1+(r)/(n)\right)^(nt)`

Then, using the given information, we obtain the amount A, in dollars:

`\begin{gathered} A=2000\cdot\left(1+(0.06)/(4)\right)^(4\cdot1) \\ \\ A=2000\cdot\left(1.015\right)^4 \\ \\ A\cong2122.73 \end{gathered}`

Answer: $2122.73.