Question

A bank account has $7000 and earns compoundinterest. It gains at a rate of 4.5% compoundedquarterly. How much money would there be after 8years? Please show work.

Answer 1

To found the amount of money after 8 years, we will use the formula below:

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

where p is the principal

r is the rate

n is the number the interest is applied

t is the time in year

From the question, P=7000 r=4.5% =0.045 n=4 t=8

substitute the values into the formula and evaluate

`A=7000(1+(0.045)/(4))^(4*8)`
`A=7000(1+0.01125)^(32)`
`=7000(1.01125)^(32)`
`\approx10013.16`

Hence, there would be $10013.16 after 8 years