Find the balance in the account after the given period.
$500 principal earning 4% compounded quarterly, after 6 yr
(1 point)
Responses
$1,281.65
$1,281.65
$634.87
$634.87
$709.26
$709.26
$632.66
To find the balance in the account after the given period, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount
P = the principal (initial amount)
r = the interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case, the principal (P) is $500, the interest rate (r) is 4% (or 0.04 as a decimal), the interest is compounded quarterly, and the time period (t) is 6 years.
Plugging in these values into the formula, we get:
A = 500(1 + 0.04/4)^(4*6)
A = 500(1 + 0.01)^(24)
A = 500(1.01)^(24)
A ≈ $634.87
Therefore, the balance in the account after 6 years is approximately $634.87.
The correct option is:
$634.87