Question

You deposit $150 into an account that vields 2% interest compounded quarterly. How much money will you have after 5 years? Use A - P(1+2)™ where P is the principal, r is the interest rate, n is the number of times per year the interest rate is compounded, and t is the time in years.)

Answer 1

Using the formula A = P(1 + r/n)^(nt), where:
P = 150 (the principal)
r = 0.02 (the interest rate)
n = 4 (since interest is compounded quarterly)
t = 5 (the time in years)

A = 150(1 + 0.02/4)^(4*5)
A = 150(1 + 0.005)^20
A = 150(1.005)^20
A = 150(1.10462)
A = 165.69

Therefore, after 5 years, you will have $165.69 in the account.