Question

Laura deposited $12,000 into an account that earns 8% interest. How much money will

she have in 5 years if the interest is compounded quarterly?

Answer 1

9514 1404 393

Answer:

$17,831.37

Explanation:

The compound interest formula is useful.

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

A = $12,000(1 + .08/4)^(4·5) = $12,000(1.02^20)

A = $17,831.37

Laura will have $17,831.37 in 5 years.