Question

Please help!

If $800 are deposited into an account with 6.5% interest rate, compounded quarterly, what is the balance after 5 years?

Answer 1

The formula for calculating the compound amount is:

A = P( 1 + R ) ^ T

Put in the numbers and calculate:

A = 800( 1.09 ) ^ 2

A = 800 x 1.1881

A = 950.48

I = A - P

I = 950.48 - 800

I = 150.48