Question

Aubrey invested $7,100 in an account paying an interest rate of 5.6% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest ten dollars, would be in the account after 19 years?

Answer 1

A≈20420

Explanation:

Answer 2

We have been given that Aubrey invested $7,100 in an account paying an interest rate of 5.6% compounded quarterly. We are asked to find the amount is account after 19 years.

We will use compound interest formula to solve our given problem.

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

A = Final amount after t years,

P = Principal amount,

r = Annual interest rate in decimal form,

n = Number of times interest is compounded per year.

t = Time in years.

`5.6\%=(5.6)/(100)=0.056`

`n=4`,
`t=19` and
`P=\$7100`

`A=\$7,100(1+(0.056)/(4))^(4\cdot 19)`

`A=\$7,100(1+0.014)^(76)`

`A=\$7,100(1.014)^(76)`

`A=\$7,100(2.8766338050114077)`

`A=\$20,424.10001558099467`

Upon rounding to nearest ten dollars, we will get:

`A\approx \$20,420`

Therefore, there will be approximately $20,420 in the account after 19 years.