Question

Suppose that when your friend was​ born, your​ friend's parents deposited ​$5000 in an account paying 4.3​% interest compounded quarterly. What will the account balance be after 17 ​years?

Answer 1

The balance in the account after 17 years would be $12,264.20.

Explanation:

The formula for calculating the balance in a savings account with interest compounded quarterly is given by:

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

Where:

A = balance after t years

P = initial deposit (principal) = $5000

r = annual interest rate as a decimal = 4.3% / 100 = 0.043

n = number of times interest is compounded per year = 4

t = number of years = 17

Plugging in these values into the formula, we get:

A = $5000 * (1 + 0.043/4)^(4 * 17)

A = $5000 * (1.010775)^68

A = $5000 * 2.45284

A = $12,264.20

So, the balance in the account after 17 years would be $12,264.20.