Question

Ashley deposited $650 in a savings account that pays 4.25% interest compounded quarterly. Calculate the total amount in the account after 12 years.

Answer 1

To calculate the total amount in the account after 12 years, we can use the formula for compound interest.

Step-by-step explanation:

To calculate the total amount in the account after 12 years, we can use the formula for compound interest:

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

where:

• A is the total amount in the account
• P is the principal amount (initial deposit)
• r is the annual interest rate as a decimal
• n is the number of times interest is compounded per year
• t is the number of years

Substituting the given values into the equation:

A = 650(1 + 0.0425/4)^(4*12)

Simplifying and calculating:

A ≈ $977.22

Therefore, the total amount in the account after 12 years would be approximately $977.22.