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You open your first interest-bearing savings account with an initial deposit of
$2,500. Interest is compounded quarterly at a rate of 3.5%. Assuming you do not
deposit any more money into the account, how much money will you have in the
account after 5 years?

Respuesta :

qop

Answer:

$2,975.85

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

[tex]A=P(1+\frac{r}{n} )^{nt}[/tex]

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, change 3.5% into a decimal:

3.5% -> [tex]\frac{3.5}{100}[/tex] -> 0.035

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

[tex]A=2,500(1+\frac{0.035}{4})^{4(5)}[/tex]

[tex]A=2,975.85[/tex]

After 5 years, the account will have $2,975.85

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