GC - If the principal amount of money put into a bank is $2000 with a 3.5% rate compounded quarterly, what is the amount after 6 years? !!HELP NOW PLS!

Question

asked Jun 8, 2022 14.3k views

1 Answer

SDF · Answer 1 · 2022-06-13T22:04:44+0000

Given:

Principal amount = $2000

Rate of interest = 3.5% compounded quarterly.

Time = 6 years

To find:

The amount after 6 years.

Solution:

The formula for amount after compound interest is:

$A=P\left(1+(r)/(n)\right)^(nt)$

Where, P is principal, r is rate of interest in decimal, n is the number of time interest compounded in an year and t is the number of years.

The interest is compounded quarterly, so
n=4 .

Substituting
P=2000,r=0.035,n=4,t=6 , we get

$A=2000\left(1+(0.035)/(4)\right)^(4(6))$

$A=2000\left(1+0.00875\right)^(24)$

$A=2000\left(1.00875\right)^(24)$

A=2465.10340

Approximate the value to the nearest hundredth.

$A\approx 2465.10$

The amount after 6 years us $2465.10. Therefore, the correct option is A.