Posted by **yenny** on Sunday, April 17, 2011 at 2:00pm.

An amount of $3000 was deposited in a bank at a rate of 2% annual interest compounded quarterly for 3yrs. The rate then increased to 3% annual interest and ws compounded quarterly for the next 3 yrs. If no money was withdrawn what was the balance at the end of this time?

- math -
**MathMate**, Sunday, April 17, 2011 at 3:35pm
$3000 at 2% for 3 years, followed by 3% for 3 years, all compounded quarterly.

The basic equation for the future value A (accumulated amount) of a principal P at r% interest per period for n periods is:

A=PR^n

where R=1+r

At the end of the three years at 2%, the amount is reinvested at 3%, so the calculated A becomes P for the second part.

First three years:

No. of periods, n = 4*3 = 12 quarters

interest per period, 1+2%/4=1.005

Principal = $3000

Amount at the end of three years:

A = PR^n = 3000*1.005^12

= 3000*1.06168

= $3185.03

For the second part,

P=$3185.03

R=1+3%/4=1.075

n=12

A=PR^n=3185.03*1.075^12=?

## Answer this Question

## Related Questions

- Finance - john deposited 3000 into an account with 5% annual interest rate ...
- College Algebra - bank a is lending money at 5.7% interest compounded annually. ...
- Math - Compound - If a bank offers interest at a nominal rate of 6%, how much ...
- math - find the effectivee rate correspoding to 3% compounded quarterly The ...
- math - You receive $12,000 and looking for a bank to deposit the funds. Bank A ...
- math - You receive $12,000 and looking for a bank to deposit the funds. Bank A ...
- math - Find the amount of money in an account after 12 years if $1000 is ...
- Math - Find the amount of money in an account after 12 years if $1000 is ...
- math - Find the amount of money in an account after 12 years if $1000 is ...
- Finance - You receive $12,000 and looking for a bank to deposit the funds. Bank ...