Question

Jamal deposited $4,000 in a savings account at a rate of 6.75%compounded quarterly. How much was in his account after six months?a. $4,136.14b. $135c. $4,135d. $136.14

Answer 1

Here, the interest is compounding quarterly. So, n = 4, r = 0.0675, t = 6/12 = 1/2.

Substitute these values in the formula:

$\begin{gathered} A=4000(1+\frac{0.0675}{4})^{4\times\frac{1}{2}} \\ \Rightarrow A=4000(\frac{4.0675}{4})^2 \\ \Rightarrow A=4000(1.016875)^2 \\ \Rightarrow A=4000(1.03403) \\ \Rightarrow A=4136.12 \end{gathered}$

Thus, option A is correct.