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Find the total amount a college student has in a savings account if $9,000 was invested and earned 3% compounded quarterly for 6 years.

User Rosalyn
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1 Answer

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Final answer:

To find the total amount in the savings account after 6 years with a principal of $9,000 and a 3% interest rate compounded quarterly, one can use the compound interest formula. After calculating, the final amount is approximately $10,774.95.

Step-by-step explanation:

The question asks to find the total amount in a savings account after $9,000 is invested at a 3% interest rate compounded quarterly over 6 years. To solve this, the formula for compound interest is used:

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

Where:

  • A is the amount of money accumulated after n years, including interest.
  • P is the principal amount (the initial amount of money).
  • r is the annual interest rate (decimal).
  • n is the number of times that interest is compounded per year.
  • t is the number of years the money is invested for.

Plugging in the values:

A = $9,000(1 + 0.03/4)(4*6)

A = $9,000(1 + 0.0075)24

A = $9,000(1.0075)24

Calculating the value using a calculator gives us:

A ≈ $9,000 * 1.197217

A ≈ $10,774.95

Therefore, the total amount in the savings account after 6 years would be approximately $10,774.95.

User Gnudiff
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