Question

Dana opened a savings account and deposited 300.00 as principal the account earns 5%interest compounded quarterly what is the balance after 2 years

Answer 1

EXPLANATION

Let's see the facts:

-Dana deposit = $300

-Interest rate = 5%

-Compounding period = quarterly

-Number of years = 2

The Compounding formula will be:

$\text{Compounded amount = P(1+}\frac{r}{n})^{nt}$

P= 300

r=5%=0.05 (In decimal form)

n= quarterly = 4

t = 2 years

Replacing values in the equation will give us:

$\text{Compounded amount = 300(1+}\frac{0.05}{4})^{4\cdot2}$$\text{Compounded amount = 300(1.0125)}^8$$\text{Compounded amount = }331.34$

Answer: Dana will have $331.34 after two years.