Question

Find the final amount of money in an account if $4,400 is deposited at 5 % interest compoundedquarterly (every 3 months) and the money is left for 10 years.The final amount is $Round answer to 2 decimal placesSubmit Question

Answer 1

Based on the problem, here are the data given:

Principal (P) = $4, 400

rate (r) = 5%

number of conversions per year (m) = 4 (quarterly)

time (t) = 10 years

To be able to solve for the final or future value, we have the following formula below:

$F=P(1+\frac{r}{m})^{mt}$

Let's use the given data and substitute it to the formula above.

$\begin{gathered} F=4400(1+\frac{0.05}{4})^{4\times10} \\ F=4400(1+0.0125)^{40} \\ F=4400(1.0125)^{40} \\ F=4400(1.643619463) \\ F\approx7,231.93 \end{gathered}$

The final amount of the money after 10 years is $7,231.93.