# math

You deposit \$2200 in an account that pays 3% annual interest. After 15 years, you withdraw the money, what is the balance if the interest is compounded quarterly?

so I figure you would get 2650.00 help please

1. 2
asked by katie
1. What you probably did was calculated simple interest for 15 years on \$1000 and added to \$2200 to give \$2650.

Compound interest formula are based on the number of periods, n, the interest was compounded.

The interest being compounded 4 times a year, so there are 15*4=60 periods of 3 months each. The corresponding interest rate for each period is therefore r = 3%/4=0.0075.

The formula for the future value using compound interest is:
FV = Principal * (1+r)^n
=2200*1.0075^60
=2200*1.565681
=\$3444.50

posted by MathMate

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