Question

Emmy puts 600.00 into an account to use for school expenses the account earns 10% interest compounded quarterly how much will be in the account after 6 years

Answer 1

The compound interest formula is:

`F=P(1+r)^n`

Where

F is the future amount [we want to solve for this, after 6 years]

P is the initial amount [Given, 600]

r is the rate of interest per period [10% annual rate, so quarterly rate is 10/4 = 2.5% so that is 2.5/100 = 0.025]

n is the time period [the number of compoundings is 6 * 4 = 24 times]

Substituting into formula we get:

`\begin{gathered} F=P(1+r)^n \\ F=600(1+0.025)^(24) \\ F=600(1.025)^(24) \\ F=1085.235 \end{gathered}`

Thus,

The amount of money after 6 years:

$1085.24