Problema Solution
how much $$ will there be in an account at the end of the 7 years if $16,000 is deposited at 6% interest compounded quarterly?(Assume no withdrawals are made)
Answer provided by our tutors
Since the interest is 6% compounded quarterly, the interest at every quarter will be 6%/4=.15%. Therefore, we can write:
Total=16000*(1.0015)^n
where n is the number of quarters that have progressed. We are asked how much will be in the account at the end of 7 years. This will be 7*4=28 quarters. Therefore, we can plug 28 in for n to get the total amount in the account at the end of 7 years. We get:
Total=16000*(1.0015)^28
Total=$16685.79
Rounded to the nearest 100th.