Find the final amount of money in an account if
$
6
,
300
is deposited at
2.5
%
interest compounded quarterly (every 3 months) and the money is left for
9
years.
9 years is 36 quarters at 2.5/4 = 0.625 %
every quarter multiply by 1.00625
6,300 * 1.00625^36 = 6,300 * 1.251446136 = 7884.11
To find the final amount of money in the account, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the final amount of money
P = the initial deposit (principal)
r = the interest rate (expressed as a decimal)
n = the number of times the interest is compounded per year
t = the number of years
In this case, the initial deposit (P) is $6,300, the interest rate (r) is 2.5% (or 0.025 as a decimal), the interest is compounded quarterly (n = 4), and the money is left for 9 years (t = 9).
Substituting these values into the formula, we have:
A = 6300(1 + 0.025/4)^(4 * 9)
Now we can calculate the final amount A.
To find the final amount of money in the account, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A is the final amount of money
P is the principal amount (initial deposit)
r is the annual interest rate (expressed as a decimal)
n is the number of times interest is compounded per year
t is the number of years
In this case, the principal amount P is $6,300, the annual interest rate r is 2.5% (or 0.025 expressed as a decimal), and the interest is compounded quarterly (n = 4). The money is left in the account for 9 years (t = 9).
Substituting the values into the formula, we get:
A = 6300(1 + 0.025/4)^(4*9)
Now we can calculate the final amount.