Question

A money market account pays 5.3% interest

compounded quarterly. What will be the balance
in the account after 5 years if $12,000 is invested?

A. $18,360.00
B. $15,613.98
C. $15,180.00
D. $14,544.00

Answer 1

`~~~~~~ \textit{Compound Interest Earned Amount} \\\\ A=P\left(1+(r)/(n)\right)^(nt) \quad \begin{cases} A=\textit{accumulated amount}\\ P=\textit{original amount deposited}\dotfill &\$12000\\ r=rate\to 5.3\%\to (5.3)/(100)\dotfill &0.053\\ n= \begin{array}{llll} \textit{times it compounds per year}\\ \textit{quarterly, thus four} \end{array}\dotfill &4\\ t=years\dotfill &5 \end{cases} \\\\\\ A=12000\left(1+(0.053)/(4)\right)^(4\cdot 5)\implies A=12000(1.01325)^(20)\implies A\approx 15613.98`