Posted by Anonymous on .
Find the ending balance in an account that opens with $5,000, earns 2.5% interest compounded quarterly, and is held for 5 years. (Round your answer to the nearest cent.)
P = Po(1+r)^n.
Po = $5000.
r = (2.5%/4) / 100% = 0.00625=Quarterly
% rate expressed as a decimal.
n = 4Comp./yr * 5yrs = 20 Compounding
Plug the above values into the given Eq.
Answer: P = $5663.54.