Question

Trina Alcala deposited $1950 in a new credit union savings account on the first of the quarter. The principal earns 4.25% interest compounded quarterly. She made no other deposits or withdrawals. What was the amount in her account at the end of 6 months?

Answer 1

Trina Alcala's credit union savings account with a 4.25% interest rate compounded quarterly grows from $1950 to approximately $1997.44 after 6 months.

Step-by-step explanation:

Trina Alcala deposited $1950 into a credit union savings account with an interest rate of 4.25% compounded quarterly. To find out the amount in her account at the end of 6 months, we use the formula for compound interest:

A = P(1 + r/n)nt

Where:

• P = principal amount ($1950)
• r = annual interest rate (4.25%, or 0.0425)
• n = number of times interest is compounded per year (4)
• t = time the money is invested for, in years (0.5)

By substituting these values into the formula, we calculate the amount in Trina's account after 6 months:

A = $1950(1 + 0.0425/4)4*0.5

After solving, we find that the amount in Trina's account at the end of 6 months is approximately $1997.44.