Find the amount of money in an account after 12 years if $1000 is deposited at 5% annual interest compounded quarterly.
You should have a formula for that
amount = 1000( 1 + .05/4)^48
= .....
To find the amount of money in an account after 12 years with an annual interest rate of 5% compounded quarterly, you can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A is the final amount after t years,
P is the principal amount (in this case, $1000),
r is the annual interest rate (5%),
n is the number of times interest is compounded per year (4 for quarterly),
t is the number of years (12).
Let's plug in these values into the formula:
A = $1000(1 + 0.05/4)^(4*12)
First, calculate 0.05/4 = 0.0125 (the quarterly interest rate of 5%).
Now, calculate (1 + 0.0125)^(4*12) = 1.0125^48 ≈ 1.8184.
Finally, multiply $1000 by 1.8184 to get the amount of money in the account after 12 years:
A = $1000 x 1.8184 ≈ $1818.40
Therefore, the amount of money in the account after 12 years with a $1000 deposit at 5% annual interest compounded quarterly is approximately $1818.40.