Answer:
Option (b) is correct.
The amount after 4 years will be $1657.24
Step-by-step explanation:
Given : an investment of 1500 in an account paying 2.5% interest.
We have to find the amount after 4 years , compounded quarterly.
Using formula for Compound interest
[tex]A=P(1+r)^n[/tex]
Where,
A = Amount
P = Principal amount
r = rate of interest
n = time period
For the given data,
P = 1500
r= 2.5 %
When Compound interest is calculated quarterly
Time becomes 4 time the original time
and rate become one forth of the original rate.
Then r = [tex]\frac{0.025}{4}[/tex]
and n = 16
Substitute, we have,
[tex]A=1500(1+\frac{0.025}{4})^{\left(4\cdot4\right)}[/tex]
Simplify, we have,
A = 1657.24
Thus, The amount after 4 years will be $1657.24
