Question

the owner of sebastopol tree farm deposits $550 at the end of each quarter into an account paying 1.75% compounded quarterly. what is the value of the account at the end of 7 years? (round your answer to the nearest cent.)

Answer 1

The value of the account at the end of 7 years is approximately $655.27.

Step-by-step explanation:

To calculate the value of the account at the end of 7 years, we need to use the formula for compound interest: A = P(1 + r/n)^(nt). A is the final amount, P is the principal (initial deposit), r is the interest rate, n is the number of times interest is compounded per year, and t is the number of years. In this case, the principal is $550, the interest rate is 1.75%, compounded quarterly (so n = 4), and the term is 7 years. Plugging in the values, we get:

A = 550(1 + 0.0175/4)^(4 * 7)

Calculating this expression gives us approximately $655.27, rounded to the nearest cent.

Answer 2

The value of the account at the end of 7 years is approximately $621.42.

Step-by-step explanation:

To find the value of the account at the end of 7 years, we can use the formula for compound interest: A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount, r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years. In this case, P = $550, r = 1.75% or 0.0175, n = 4 (compounded quarterly), and t = 7. Plugging in these values, we get:

A = $550(1 + 0.0175/4)^(4*7)

Simplifying this equation gives us:

A ≈ $550(1.004375)^28

A ≈ $550(1.129857986109405)

A ≈ $621.42

Therefore, the value of the account at the end of 7 years is approximately $621.42.