Question

Chris invests $800 into an account with a 2.2% interest rate that is compounded quarterly. How much money will he have in this account if he keeps it for 5 years?

Answer 1

Chris will have $877.94 in his account after 5 years.

Step-by-step explanation:

To calculate the future value of an investment with compound interest, we can use the formula:

Future Value = Principal Amount × (1 + Interest Rate/Number of Compounding Periods)(Number of Compounding Periods × Number of Years)

Given that Chris invests $800 into an account with a 2.2% interest rate compounded quarterly, the formula becomes:

Future Value = $800 × (1 + 0.022/4)(4 × 5)

Plugging in the values, we can calculate:

Future Value = $800 × (1 + 0.0055)20 = $877.94