Question

At the beginning of each quarter, $1,650 is deposited into a college fund. The fund earns 7% annual interest, compounded quarterly, and paid into the account at the end of the quarter. How much is in the account if deposits are made for 8 years?

Answer 1

To find the amount in the account after 8 years, we need to consider the compound interest earned and the amount deposited every quarter. The formula to calculate the compounded amount is A = P(1 + r/n)^(n*t), and plugging in the given values, we find that the amount in the account after 8 years is approximately $36,494.51.

Step-by-step explanation:

To find the amount in the account after 8 years, we need to consider the amount deposited every quarter and the compound interest earned.

Each quarter, $1,650 is deposited into the account. In 8 years, there are 8 * 4 = 32 quarters.

The formula to calculate the compounded amount is A = P(1 + r/n)^(n*t), where A is the final amount, P is the principal amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the number of years.

Plugging in the given values, we have A = 1650 * (1 + 0.07/4)^(4 * 8), which simplifies to A = 1650 * (1.0175)^32.

Calculating this, we find that the amount in the account after 8 years is approximately $36,494.51.