Question

Which of the following is the balance for a single $1,595 deposit in an account with an APR of 2.36% that compounds interest quarterly and is invested for 6 years?

A. $1,774.32
B. $1,920.15
C. $1,858.64
D. $1,632.41

Answer 1

To find the balance for a single $1,595 deposit in an account with an APR of 2.36% that compounds interest quarterly and is invested for 6 years, use the formula for compound interest.

Step-by-step explanation:

To find the balance for a single $1,595 deposit in an account with an APR of 2.36% that compounds interest quarterly and is invested for 6 years, we can use the formula for compound interest:

Balance = Principal (1 + Interest Rate / Number of Compounding Periods) ^ (Number of Compounding Periods x Number of Years)

Plugging in the values:

Principal = $1,595

Interest Rate = 2.36% = 0.0236

Number of Compounding Periods per Year = 4 (quarterly)

Number of Years = 6

We can calculate the balance as follows:

Balance = $1,595 * (1 + 0.0236 / 4)^(4 * 6)

Balance = $1,595 * (1.0059)^(24)

Balance = $1,595 * 1.163172536

Balance = $1,857.64

Therefore, the balance for the deposit is $1,857.64.