Question

Jim opened a savings account and deposited 800.00 as principal the account earns 8%interest compounded quarterly what is the balance after 5 years

Answer 1

In compound interest , theres a constant quantity added periodically, during a time.

general formula is

P' = P (1 + r/100)^ t

P is initial amount, P' is final amount

r is interest rate, and t , time balance

Then, replacing values

P' = 800.00 •( 1 + 8/100) ^ (5x4)

quarterly means , every 3 months.

There are in 5 years , 4x5 = 20 quarterlys

Then, equation is

P' = 800.00•(1+8/100) ^20

P' = 3728.77