Question

Suppose that when your friend was​ born, your​ friend's parents deposited ​$5000 in an account paying
5.2% interest compounded
quarterly. What will the account balance be after
14years?

Answer 1

Answer:

$10,306.21

Step-by-step explanation:

Lets use the compound interest formula provided to solve this:

$A=P(1+\frac{r}{n} )^{nt}$

P = initial balance

r = interest rate (decimal)

n = number of times compounded annually

t = time

First, lets change 5.2% into a decimal:

5.2% -> $\frac{5.2}{100}$ -> 0.052

Since the interest is compounded quarterly, we will use 4 for n. Lets plug in the values now:

$A=5,000(1+\frac{0.052}{4})^{4(14)}$

$A=10,306.21$

The account balance will be $10,306.21