153k views
2 votes
you deposit 10000 into a bank account. the account pays 4 annual interest compounded quarterly. find the balance after 5 years.

User Dnnagy
by
8.2k points

1 Answer

7 votes

Answer: 12,201.90 dollars

You may need to delete the comma if you are entering this result into a computer system.

=====================================================

Work Shown:

P = 10,000 = deposit

r = 0.04 = decimal form of 4% interest rate

n = 4 = we're compounding 4 times a year

t = 5 years

-------------

A = P*(1+r/n)^(n*t) .... compound interest formula

A = 10,000*(1+0.04/4)^(4*5)

A = 12,201.9003994797

A = 12,201.90

After 5 years, there is $12,201.90 in the account.

This is assuming you do not deposit any more money, and it also assumes that you don't take any money out during the 5 year timespan either.

User Shahidh
by
8.1k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories