Find the balance in the account.
$2,500 principal earning 4%, compounded quarterly, after 4 years
2500(1+.04/4)^(4*4) = 2931.45
what is
2500(1.01)^16 ?
To find the balance in the account after 4 years, we can use the compound interest formula:
A = P(1 + r/n)^(nt)
where:
A = the final balance
P = the principal (initial amount)
r = the annual interest rate (as a decimal)
n = the number of times interest is compounded per year
t = the number of years
In this case:
P = $2,500
r = 4% = 0.04 (as a decimal)
n = 4 (compounded quarterly)
t = 4 (years)
Substituting these values into the formula:
A = 2500(1 + 0.04/4)^(4*4)
A = 2500(1.01)^(16)
A ≈ 2500(1.169858)
A ≈ $2,924.65
Therefore, the balance in the account after 4 years will be approximately $2,924.65.
To find the balance in the account after 4 years, we can use the formula for compound interest:
A = P(1 + r/n)^(nt)
Where:
A = the balance after t years
P = the principal amount
r = the annual interest rate (in decimal form)
n = the number of times interest is compounded per year
t = the number of years
In this case, the principal amount (P) is $2,500, the annual interest rate (r) is 4% (or 0.04 in decimal form), the interest is compounded quarterly (n = 4), and the number of years (t) is 4.
Now let's substitute the values into the formula and calculate the balance (A):
A = 2500(1 + 0.04/4)^(4*4)
A = 2500(1 + 0.01)^16
A = 2500(1.01)^16
A ≈ $2,801.77
Therefore, the balance in the account after 4 years is approximately $2,801.77.