Question

Mai deposited $4000 into an account with 4.8% interest, compounded quarterly. Assuming that no withdrawals are made, how much will she have in the

account after 7 years?
Do not round any intermediate computations, and round your answer to the nearest cent.

Answer 1

5,586.17

Explanation:

A = $ 5,586.17

A = P + I where

P (principal) = $ 4,000.00

I (interest) = $ 1,586.17

Compound Interest Equation

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

Where:

A = Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

R = Annual Nominal Interest Rate in percent

r = Annual Nominal Interest Rate as a decimal

r = R/100

t = Time Involved in years, 0.5 years is calculated as 6 months, etc.

n = number of compounding periods per unit t; at the END of each period