Question

$2, 900 is invested in an account earning 6.1% interest (APR), compounded quarterly. Write a function showing the value of the account after t years, where the annual growth rate can be found from a constant in the function. Round all coefficients in the function to four decimal places. Also, determine the percentage of growth per year (APY), to the nearest hundredth of a percent.

Answer 1

Answer: The value of the account after t years can be found using the formula:

Value = 2900 * (1 + 0.0061/4)^(4t)

The annual growth rate, or APR, is 6.1%. When this rate is compounded quarterly, the effective annual growth rate, or APY, is 6.17%, which is the nearest hundredth of a percent.

Therefore, the function showing the value of the account after t years is:

Value = 2900 * (1 + 0.0061/4)^(4t)

And the annual growth rate, or APY, is 6.17%.