Question

You deposit $8000 into a bank account that has 4% interest compounded QUARTERLY.

Determine the amount of money in the bank after 6 years.

Answer 1

$11111.1

Explanation:

I=principal x 100%/r x t

i=8000x100%=800000/12 x 6

I=800000/72=11111.1

Answer 2

$10,157.90

Explanation:

We can use the compounded quarterly interest equation for this problem: A = P(1 + r/n)^(nt)

Step 1: Plug in known variables

A = 8000(1 + 0.04/4)^[(4)(6)]

Step 2: Calculate

A = 10157.9

And you have your final answer.