Question

Kristen deposited $2850 in a compound interest account. If the account earns 5%interest compounded quarterly, find the total value of the investment after 5 years.

Answer 1

Answer:

$7561.898

Explanation:

To find the total value of the investment after t quarters, we can use the following equation:

$A=P(1+r)^t$

Where P is the initial investment, r is the interest rate and t is the number of quarters.

Since every year has 4 quarters, 5 years have 20 quarters.

So, replacing P by $2850, r by 0.05, and t by 20, we get:

$\begin{gathered} A=2850(1+0.05)^{20} \\ A=7561.898 \end{gathered}$

Therefore, the total value of the investment after 5 years is $7561.898