Question

Suppose an amount of $10,000 is deposited into a bank account that pays 4% interest compounded four times a year. If there are no other withdrawals or deposits, which equation models the value of the account after 5 years?

Answer 1

`A=10,000(1+(0.04)/(4))^(4(5))`

Explanation:

For a problem like this, we would use the compound interest formula:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, lets change 4% into a decimal:

4% ->
`(4)/(100)` -> 0.04

Since the interest is compounded 4 times a year, we will use 4 for n.

The equation is shown below:

`A=10,000(1+(0.04)/(4))^(4(5))`

Answer 2

C) A = 10,000(1.01)^20

Explanation:

just took the same question