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Jeremy invests $8, 500 into an account with a 2.4% interest rate that is compounded quarterly. How much money will be in

this account after 6 years?
Round your answer to the nearest cent.
Do NOT round until you have calculated the final answer.

1 Answer

8 votes

Answer:

$9,812.29

Explanation:

The amount in Jeremy's account can be computed using the compound interest formula.

__

account value

The formula for the value of an account earning compound interest at annual rate r, compounded n times per year for t years is ...

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

where P is the principal invested.

__

formula application

When P=$8500, r=0.024, n=4, t=6, the formula becomes ...

A = $8500(1 +0.024/4)^(4·6) = $8500(1.006^24) ≈ $9812.29

There will be $9,812.29 in this account after 6 years.

User Nikolay Hristov
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