Question

Sara deposited $4500 in an account that pays 7% interest compounded quarterly. What will the balance be in 8 years?

Answer 1

Using the formula:

A = P(1 + R)^T

Put in the numbers:

A = 4500(1 + 0.07)^8

Then calculate:

= 4500(1.07)^8

= 4500 x 1.71818618

= $7731.83781

I = A - P

= 7731.83781 - 4500

= $3231.83781