Final answer:
To calculate how much Patti will have in her account in two years, we can use the formula for compound interest.
Step-by-step explanation:
To calculate how much Patti will have in her account in two years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
P = principal amount (initial deposit)
r = annual interest rate (as a decimal)
n = number of times interest is compounded per year
t = number of years
In this case, Patti deposits $1,400 at the end of each quarter, so she makes 4 deposits per year. The interest rate is 10% (0.10) and it is compounded quarterly (n = 4). Therefore, the formula becomes:
A = 1400(1 + 0.10/4)^(4*2)
Using a calculator, we can evaluate this to find that Patti will have approximately $1,883.60 in her account in two years.