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What balance will be in an account that has an initial deposit of $4600 with an APR of 1.8%? The money is compounded quarterly for 30 years.

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User Troglo
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1 Answer

23 votes
23 votes

Final answer:

The balance in the account after 30 years will be approximately $7884.

Step-by-step explanation:

To calculate the balance in the account, we can use the formula for compound interest: A = P(1 + r/n)^(nt).

Where:

  • A is the final balance
  • P is the initial deposit
  • r is the annual interest rate
  • n is the number of times interest is compounded per year
  • t is the number of years

To find the balance, we plug these values into the formula:

  • P = $4600
  • r = 1.8% or 0.018 (in decimal form)
  • n = 4 (since interest is compounded quarterly)
  • t = 30 years

Plugging in the values from the question, we have:

A = 4600(1 + 0.018/4)^(4*30)

Simplifying the equation gives:

A = 4600(1.0045)^(120)

A = 7884.07

The balance in the account after 30 years will be approximately $7884.

User Lijo Abraham
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3.0k points
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