Answer:
He will have $276.10 available towards the down payment for his motorcycle
Step-by-step explanation:
The compound interest formula is given by:
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
Where A is the amount of money, P is the principal(the initial sum of money), r is the interest rate(as a decimal value), n is the number of times that interest is compounded per unit t and t is the time the money is invested or borrowed for.
In this problem, we have that:
[tex]P = 250, t = 2, r = 0.05[/tex]
Compounded quarterly, so n = 12/4 = 3.
We have to find A.
[tex]A = P(1 + \frac{r}{n})^{nt}[/tex]
[tex]A = 250(1 + \frac{0.05}{3})^{3*2}[/tex]
[tex]A = 276.1[/tex]
He will have $276.10 available towards the down payment for his motorcycle
