Question

$2750 is invested at an interest rate of 3.5% APR compounded quarterly. Determine the amount after 7 years. Round your answer to the nearest hundredth.

Answer 1

The compound interest formula is A = P(1 + r/n)^(nt) where A is the final amount, P is the principal (initial deposit), r is the annual interest rate (expressed as a decimal), n is the number of times interest is compounded per year, and t is the number of years.

In this case, P = 2750, r = 0.035, n = 4 (because interest is compounded quarterly) and t = 7 (because we are trying to find the balance after 7 years).

So the formula becomes:

A = 2750(1 + 0.035/4)^(4*7)

By plugging the number into the formula we can find the final amount after 7 years

A = $3,974.23

So the amount of money in the account at the end of 7 years is $3,974.23, rounded to the nearest hundredth.