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Moe invested $2250 in a savings plan. It will pay him 4.6% compounded quarterly. How much money, to the nearest cent, will he have in his savings account after 9 years?

1 Answer

5 votes

Answer:

$3395.7

Explanation:

Principal = $2250

Rate = 4.6% = 0.046

Time (t) = 9 years

Number of times in a year(N) = 4 (since it's quarterly)

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

A = compound interest

P = principal amount

R = rate of the interest

N = number of times the interest is compounded

T = time duration

A = 2250 × (1 + 0.046/4)^(4 × 9)

A = 2250 × (1 + 0.0115)³⁶

A = 2250 × (1.0115)³⁶

A = 2250 × 1.5092

A = $3395.7

The interest compounded after 9 years is $3395.7

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