Question

Find the amount accumulated after investing a principal P for t years at an interest rate compounded k times per year. P = $3,500 r= 5% t = 10 k = 4

A = ?

Answer 1

To the nearest cent, the accumulated amount over the 10 years is $5,752.67

Explanation:

Here, we want to use the given formula to find the accumulated amount on the deposit/investment

we have this as follows;

A = P(1 + r/k)^kt

P is the amount invested which is the principal = $3,500

r is the interest rate = 5% = 5/100 = 0.05

k is the number of times interest is compounded yearly = 4

t is the number of years = 10

Substituting these values in the formula, we have;

A = 3500(1 + 0.05/4)^(4 * 10)

A = 3500 (1 + 0.0125)^40

A = 3500(1.0125)^40

A = $5,752.67