Answer:
a) $80,023.88
b) $23,916.88
Step-by-step explanation:
a) The future value formula applies.
FV = P(1 +r/n)^(nt)
where P is the principal invested (56,107), r is the annual interest rate (.055), n is the number of times per year interest is compounded (4), and t is the number of years (6.5).
Filling in the values and doing the arithmetic, we get ...
FV = $56,107×(1 +.055/4)^(4×6.5) = $56107×1.01375^26 ≈ $80,023.88
The amount in the account after 6 1/2 years is $80,023.88.
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b) The interest earned is the difference between the initial deposit and the account balance:
interest = $80,023.88 -56,107.00 = $23,916.88
The interest earned is $23,916.88.
