Posted by **rock** on Tuesday, December 13, 2011 at 11:19am.

Suppose you deposit a principal amount of p dollars in a bank account that pays compound interest. If the annual interest rate r (expressed as a decimal) and the bank makes interest payments n times every year, the amount of money A you would have after t years is given by

Find the account balance after 20 years if you started with a deposit of $1000, and the bank was paying 4% interest compounded quarterly (4 times a year). Round your answer to the nearest cent.

I used the formula A(t)=P(1+ r/n)nt

and got 1010 and this is not the correct answer...

- Alg 2 -
**Steve**, Tuesday, December 13, 2011 at 12:58pm
A(t)=P(1+ r/n)^nt

A(20) = 1000(1.013333)^80

= 1000 * 13.7795

= 1377.95

Don't know how you plugged in your numbers to get 1010.

- Alg 2 - correction -
**Steve**, Tuesday, December 13, 2011 at 1:03pm
Rats! I compounded 3x/year, not 4.

A(t)=P(1+ r/n)^nt

A(20) = 1000(1.01)^80

= 1000 * 2.21671

= 2216.71

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