Question

if $1,100 is deposited in a savings account that pays interest at a rate of 8% per year compounded quarterly, find the balance after four years​

Answer 1

The balance is $410.06

Explanation:

Given:

P = Principal amount: $1,100

r = Interest rate: 8 % or 0.08

n = compounded quarterly: 4

t = years: 4

This is the formula:

`A = P (1 + r/n)^(nt)`

Insert the values

`A = 1,100 (1 + 0.08/4)^((4)(4))`

`A = 1,100 (1 + 0.02)^(16)\\A = 1,100 (1.02)^(16)\\A = 1,100 (1.3727857050906121839871923329434)\\`

A = 1510.0642755996734023859115662377 or $1,510.06

Now subtract 1,510.06 to 1,100 to find the balance.

1,510.06 - 1,100 = $410.06