Question

Reagan opened a savings account and deposited 200.00 the account earns 1%interest compounded quarterly what is the balance after 4 years

Answer 1

Initial amount = 200 = C

interest = 1% = r = 0.01 = 0.01/4 = 0.0025

compounded quaterly four times in a year

time = 4 years

Equation

Cf = C(1 + r/100) ^t

Substitution

Cf = 200(1 + 0.0025)^4

Cf = 200(1.0025)^4

Cf = 200(1.010037)

Cf = $202