Question

If you deposit $4,000 into an account paying 6% annual interest compounded quarterly, how much money will be in the account after 5 years?

Round to the nearest cent if necessary.

Answer 1

Answer: 1200 dollars

Step-by-step explanation:For this question we use the formula:

principal amount x interest rate/100 x time

4000 x 6/100 x 5

4000 x 0.06 x 5

1200

Answer 2

$5,387.42

Explanation:

Use the formula:

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

where A = amount accrued (principal + interest)
P = initial deposit

r = annual interest rate as a decimal

n = number of times compounded annually

t = number of years

Given
P = 4000
r = 6/100 = 0.06
n = 4 times a year
t = 5 years

`A = 4000\left( 1 + (0.06)/(4)\right)^(4\cdot 5)\\\\A = 4000 ( 1+ 0.015)^(20)\\\\A = 4000 (1.015)^(20)\\\\A = \$5,387.42`