Question

Sarah invested $800 in an account paying an interest rate of 3.5% compounded quarterly. Assuming no deposits or withdrawals are made, how much money, to the nearest cent, would be in the account after 8 years?

Answer 1

Answer:

$ 1,057.22

Step-by-step explanation:

A = $ 1,057.22

A = P + I where

P (principal) = $ 800.00

I (interest) = $ 257.22

Answer 2

After 8 years, total amount will be $1057.

Given that,

• Principal amount that invested is (P) $800.

• Annual interest rate is (r) 3.5% or 0.035.

• We need to find total amount after (t) 8 years when, interest is compounding quarterly n (4).

According to the given data, calculation are as follows,

Compound interest formula,

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

A = $800 (1 + \frac{0.035}{4} )^{4\times 8}$

A = $800 (1 + 0.00875 )^{32}$

A = $800 $\times$ 1.3215

A = $1057.2 or $1057.

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