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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.)
$ 1

  • math -

    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
    periods.

    Plug the above values into the given Eq.

    Answer: P = $5663.54.

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