Question

Your college fund has $56,000. It is currently in an account which pays 3.4% compounded quarterly. How much money will you have in 11 years

Answer 1

$81,269.53

Explanation:

Lets use the compound interest formula provided to solve this:

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

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 3.4% into a decimal:

3.4% ->
`(3.4)/(100)` -> 0.034

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

`A=56,000(1+(0.034)/(4))^(4(11))`

`A=81,269.53`

After 11 years, you will have $81,269.53