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Use the compound interest formula, the formula A equals P times 1 plus r over n to the n times t power . If $10,000 is invested at 2 percent quarterly for 5 years, what is the amount at the end of the term?

A $11,052
B$11,049
C $11,046
D$11,051

User VenkatKA
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1 Answer

1 vote

Answer:

Option B is the correct answer.

Explanation:

Initial amount deposited into the account is $10000 This means that the principal is

P = 10000

It was compounded quarterly. This means that it was compounded for four times in a year. So

n = 4

The rate at which the principal was compounded is 2%. So

r = 2/100 = 0.02

It was compounded for 5 years. So

t = 5

The formula for compound interest is

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

A = total amount in the account at the end of t years. Therefore

A = 10000 (1+0.02/4)^4×5

A = 10000 (1.005)^20

A = $11049

User IvanTheTerrible
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