Question

a savings account earns 8% interest each year, compounded quarterly (4 times a year). If a person invests $100 and makes no further deposits or withdrawals, what is the balance in the account after 3 years?​

Answer 1

124 dollars

Explanation:

.08 times 100 equals 8

eight times three is twenty four

that is the simplest answer. if the question had any further interests it might of been 126 or even 125.97

Answer 2

Answer: 126.82 dollars

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Work Shown:

The given values are

• P = 100 = amount deposited (principal)
• r = 0.08 = decimal form of the annual interest rate
• n = 4 = compounding frequency
• t = 3 = number of years

Which means,

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

A = 100*(1+0.08/4)^(4*3) .... plug in given values

A = 126.824179456254 ..... value is approximate

A = 126.82 ...... round to the nearest cent

The balance of the account after three years is $126.82